Real estate investment trusts (REITs) are one of Singaporean’s favourite investment vehicles. Not only do they provide exposure to a variety of different sectors of real estate, REITs also enjoy tax shields and offer investors regular dividends.
With that, here are three highest-yielding REITs in the market right now.
Lippo Malls Indonesia Retail Trust (SGX: D5IU) tops the list with a distribution yield of 8.4%. The retail REIT has faced numerous challenges in the past year, including Indonesia’s new tax regulations, weakening of the Indonesian Rupiah against the Singapore dollar, and higher total operating expenses.
In the first quarter of 2019, gross rental income continued its slide, falling 7.1% from the corresponding period last year, with distribution per unit (DPU) coming down 17.9% from a year ago.
The poor recent performance of the REIT has caused market participants to sell-down its units some 50% below its all-time high. At the current price, Lippo Malls Indonesia Retail Trust trades at a 22% discount to its book value.
Dasin Retail Trust (SGX: CEDU) comes in second place with a 12-month trailing distribution yield of 8.2%. Dasin Retail Trust is a China-focused retail REIT that owns four malls in the Greater China region.
In the first quarter of 2019, revenue declined 5.9% due to asset enhancement initiatives at one of its malls.
Current unitholders are also enjoying a distribution waiver from two of the REIT’s largest shareholders. The distribution waiver will last until 2022. Excluding the waiver, DPU for the first quarter of 2019 is 0.95 Singapore cents, substantially less than the 1.7 Singapore cents it recorded with the waiver.
Completing the list is another China-focused REIT, EC World Real Estate Investment Trust (SGX: BWCU). EC World REIT is a specialised logistics and E-commerce logistics player that owns seven properties, six of which are located in HangZhou, China.
In the first three months 2019, EC World managed to eke out a 3.1% increase in DPU despite a weakening Chinese Yuan.
It also recently announced the proposal to acquire another property in HangZhou. The acquisition is expected to be yield-accretive and is also purchased at below book value.
Based on its first-quarter DPU of 1.501 Singapore cents, EC World REIT has an annualised distribution yield of 7.7%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia owns units of EC World Real Estate Investment Trust.