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3 REITs Offering Exposure to Iconic Properties in Singapore

Do you want to be a part-owner in some of Singapore’s most iconic buildings? Well, you can be.

Many of Singapore’s iconic properties are owned by real estate investment trusts (REITs). By investing in these REITs, you are effectively becoming a part-owner in these iconic properties,  earning rental income in the process.

Here are three REITs that offer investors exposure to some of Singapore’s most famous properties.

Singapore’s largest shopping centre

Mapletree Commercial Trust (SGX: N2IU) owns the iconic VivoCity. Not only is VivoCity the largest shopping centre in Singapore, it’s also the gateway to Sentosa, with trams connecting directly from VivoCity to the island.

VivoCity is not just a pretty name to have in your portfolio; it also boasts high rental growth rates. In the 12 months ended 31 March 2019, VivoCity’s revenue and net property income grew 3.0% and 3.6%, respectively.

Despite being nearly 13 years old, VivoCity has not lost its appeal. Shopper traffic over that 12-month period reached a record high of 55.2 million, in spite of the impact from some renovation works in the building. That translates to a staggering 151,230 visitors every single day!

More importantly, the property looks set to deliver higher revenue in the future. The renovation works are expected to be completed by September 2019, and management said that it expects a 40% return on investment and positive rental uplift.

Besides VivoCity, Mapletree Commercial Trust also owns Mapletree Business City I, PSA Building, Mapletree Anson, and Bank of America Merrill Lynch HarbourFront.

A portfolio of the who’s who of prime office properties in Singapore

CapitaLand Commercial Trust (SGX: C61U) is Singapore’s first and largest commercial REIT. Its portfolio reads like the who’s who of Singapore’s finest office buildings in the central business district (CBD).

The REIT owns iconic towers such as Capital Tower, Asia Square Tower 2, and Six Battery Road, and it has an interest in Raffles City Singapore. The REIT has a total of nine properties in its portfolio: eight in Singapore and one in Germany. 

Recently, CapitaLand Commercial Trust announced that it would be acquiring a second property in Germany, expanding its global footprint.

More importantly for investors, CBD office rents have seen a nice rebound from the trough recorded in 2017. With its portfolio of Grade A office properties, CapitaLand Commercial Trust looks likely to ride on the tailwinds of the industry.

The REIT also announced that WeWork will be leasing the entire building at 21 Collyer Quay for seven years, after HSBC moves out. This should provide visible rental income in the future.

Singapore’s private health scene

If you want exposure to Singapore’s private health scene, Parkway Life REIT (SGX: C2PU) is the investment vehicle for you.

The healthcare REIT’s portfolio is anchored by three of Singapore’s most established private hospitals: Mount Elizabeth Hospital, Gleneagles Hospital, and Parkway East Hospital.

The three hospitals are collectively worth S$1.16 billion and are master leased to a stable tenant, which itself is owned by one of the largest healthcare groups in the region, IHH Healthcare Bhd (SGX: Q0F). The stable tenant, who is also a major shareholder in Parkway Life REIT, will provide stability to the REIT’s rental income.

Besides the three hospitals in Singapore, Parkway Life REIT also owns a portfolio of 46 healthcare properties in Japan and one in Malaysia. Many of these have favourable long-term lease structures with “up only” rent review.

The strength of its key tenants, long-term lease structures, and built-in annual rental escalation at some of its properties make Parkway Life a stable REIT with visible rental income over the long term.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of CapitaLand Commercial Trust, Mapletree Commercial Trust, and Parkway Life Real Estate Investment Trust. Motley Fool Singapore contributor Jeremy Chia does not own shares in any companies mentioned.