Investors eager to gain exposure to overseas properties can do so by investing in REITs that own overseas assets. In the last couple of years, there has been an increasing number of such REITs listed on our local stock exchange, and these have increased both the breadth and types of assets in which we can invest.
From being purely Singapore-focused a decade ago, many REITs now own assets in countries as diverse as Japan, Australia, Europe, China, and the US.
Of course, investors should employ discretion, too, when it comes to choosing great REITs to invest in, as not all REITs are made equal. We should be sure to select REITs with quality assets in countries with consistently high levels of demand, as occupancy rates remain high, and the assets can then provide a steady stream of reliable rental income. Also important are the growth opportunities available for the REIT, both in terms of organic growth in distribution per unit (DPU) and acquisitive growth.
Here are three overseas REITs that have reported higher year-on-year DPU.
1. Sasseur REIT
Sasseur REIT (SGX: CRPU) is the first outlet mall REIT listed in Asia. Its portfolio consists of four quality retail outlet mall assets located in Chinese cities such as Chongqing, Kunming, and Hefei, with a total net lettable area of 312,844 square metres.
Sasseur reported a DPU of 1.608 Singapore cents in its recent Q2 2019 earnings report – this was 5.9% higher on a year-on-year basis compared to Q2 2018. Rental income and distributable income rose 2.7% and 6.8% year-on-year, respectively. The annualised distribution yield based on the Q2 2019 DPU was 8.2% at the last traded share price of S$0.79.
2. Lippo Malls Indonesia Retail Trust
Lippo Malls Indonesia Retail Trust (SGX: D5IU), or LMIR Trust, invests in income-generating retail properties. Its portfolio consists of 23 retail malls and seven retail spaces within other retail malls for a total net lettable area of 910,749 square metres and a total valuation of IDR 19.5 trillion as of 31 December 2018. These malls are located in major cities in Indonesia with large middle-income populations.
For Q2 2019, LMIR Trust’s DPU rose by 1.7% year-on-year to 0.60 Singapore cents. At the REIT’s last traded price of S$0.22, the annualised dividend yield is 10.9%.
3. iREIT Global
iREIT Global (SGX: UD1U) invests in income-generating properties for office, retail, and industrial purposes. Its portfolio consists of five freehold properties located in the German cities of Berlin, Bonn, Darmstadt, Munster, and Munich, and has a total net lettable area of 200,000 square metres as well as 3,400 car park spaces.
The REIT reported a DPU of 1.51 Singapore cents for Q2 2019, up 1.3% year-on-year. The depreciation of the euro against the SGD negatively affected DPU growth, as the year-on-year DPU rise in euro terms was 3.3% year-on-year. The REIT’s annualised dividend yield was 8.1%.
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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 Royston Yang does not own shares in any of the companies mentioned.