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2 Singapore REITs That Have Delivered Positive Performances Recently

We are now in the busiest part of earnings season. Given many REITs are reporting their results at the same time, it would be useful to group them into three categories – good, bad and mixed.

In this article, I’ll look at two REITs that have recently delivered positive financial results.

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Logistics powerhouse

The first REIT on the list is Mapletree Logistics Trust (SGX: M44U) or MLT. As a quick introduction, MLT is a real estate investment trust (REIT) that owns 137 logistics properties around the Asia-Pacific region that includes Singapore, Hong Kong, Japan, South Korea, Australia, and others.

For the quarter ended 30 June 2019, gross revenue grew 13.6% year-on-year to S$119.8 million while net property income (NPI) jumped by 18.2% during the period to S$106.1 million. Similarly, distribution per unit (DPU) was up by 3.5% year-on-year to 2.025 cents. The growth in DPU was achieved despite an increase in shares from 3.2 billion last year to 3.6 billion this year. The stronger performance was mainly driven by growth from the existing portfolio as well as contributions from new acquisitions.

Ms Ng Kiat, Chief Executive Officer of MLT’s REIT manager, commented:

“We have achieved another set of stable performance underpinned by our focus on proactive lease management and contributions from an enlarged portfolio. Amidst growing economic uncertainties, we will remain disciplined on driving stability in the portfolio while maintaining a firm focus on rejuvenation to strengthen MLT’s resilience”

As of 30 June 2019, the REIT’s gearing stood at 36.8% and its occupancy rate stood at 97.6%.

Office space

The next REIT on the list is CapitaLand Commercial Trust (SGX: C61U) or CCT. As a quick introduction, CCT is one of the largest commercial REITs in Singapore by market capitalisation. The REIT has ownership over nine commercial properties in Singapore and one property in Germany.

Mr. Kevin Chee, Chief Executive Officer of the Manager, commented:

“We are pleased that CCT achieved higher 2Q 2019 DPU of 2.20 cents. Portfolio occupancy as at 30 June 2019 remained high at 98.6%. The resilient performance can be attributed to the consistent execution of our value creation strategy.”

As part of our proactive management of existing operational assets, we plan to commence refurbishment and asset repositioning of 21 Collyer Quay and Six Battery Road respectively in 2020. We also announced CCT’s proposed acquisition of a 94.9% stake in Main Airport Center in Frankfurt, Germany, for EUR 251.5 million (about S$387.1 million2) at an initial net property income yield of 4.0%. Depending on the funding structure and on a pro forma basis, the acquisition is expected to be accretive to 1H 2019 DPU by 1.0% to 2.5%. As the proposed acquisition is an interested party transaction, it will be subject to independent unitholders’ approval, expected in September 2019.

These initiatives are a continuation of our multi-pronged strategy to ensure our properties remain relevant, complemented by disciplined investments to generate sustainable growth for CCT.”

For the quarter ended 30 June 2019, CCT’s gross revenue grew 3.0% year-on-year to S$101.0 million while NPI improved by 0.8% during the period to S$78.4 million. The positive performance was driven by acquisition, as well as stronger performance in a number of existing assets. Consequently, DPU came in stronger by 1.9% year-on-year to 2.20 cents.

As of 30 June 2019, the REIT’s gearing stood at 34.8% while its committed occupancy rate stood at 98.6%.

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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 Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has recommended the shares of CapitaLand Commercial Trust and Mapletree Logistics Trust.