Investors who are looking for exposure to real estate investment trusts (REITs) often look for a myriad of factors when selecting one, such as the sustainability of the distribution per unit (DPU), asset type, occupancy level, and potential growth prospects, to name a few. Such aspects offer assurance that a REIT is well-managed and has strong long-term growth prospects.
Singapore Exchange, or SGX, has written on the five best-performing Singapore REITs (S-REITs) in the first seven months of this year (year-to-date). Though unit price performance does not always imply a well-run business, it offers investors a good platform for doing their initial research and due diligence.
These five S-REITs below have clocked up an average total return of 47% year-to-date, and this is a very impressive performance by any standards. As a comparison, SGX’s iEdge S-REIT Index has recorded a total return of 19.7% over the same period.
1. RHT Health Trust
RHT Health Trust (SGX: RF1U) is a cash trust that used to own healthcare assets, but these were disposed of in entirety to Fortis Healthcare Limited on 15 January 2019. As a result of this disposal, RHT chalked up a total return of 98.2% year-to-date.
Fortis has aborted its plan to sell its stake in RHT, and RHT’s trustee manager is exploring various options for the trust, including identifying potential new businesses to be injected into it. If the trust remains as a cash trust by 15 January 2020 without a viable business, it will be delisted from SGX.
2. Ascendas Hospitality Trust
Ascendas Hospitality Trust (SGX: Q1P), or AHT, is a REIT that invests in real estate used predominantly for hospitality purposes. Its portfolio consists of 14 quality hotels with more than 4,700 rooms located in key cities in Australia, Japan, South Korea and Singapore. The REIT provided a total return of 38.6% year-to-date, partly due to Ascott Residence Trust’s (SGX: A68U) proposed combination announced in early July.
In its latest quarter, AHT reported a 3.5% year-on-year increase in gross revenue but DPU fell 5.2% to 1.28 Singapore cents. A court hearing for the trust scheme meeting is expected in September 2019, after which both Ascott Residence Trust and AHT will convene their respective extraordinary general meetings to vote on the proposed combination.
3. Ascendas India Trust
Ascendas India Trust (SGX: CY6U), or AIT, is the first Indian property trust in Asia. AIT’s portfolio comprises seven world-class IT business parks and one logistics park in India. The trust’s assets under management, as of 30 June 2019, was S$1.9 billion. The REIT registered a total return of 35.3% year-to-date.
AIT’s latest quarter saw total property income jump by 10% year-on-year (in Singapore dollar terms), while DPU surged 28% year-on-year to 2.05 Singapore cents.
4. Lippo Malls Indonesia Retail Trust
Lippo Malls Indonesia Retail Trust (SGX: D51U), or LMIRT, is a REIT that seeks to invest in a portfolio of income-generating retail properties located in Indonesia. Its portfolio comprises 23 retail malls with a total net lettable area of 910,749 square metres with a valuation of IDR 19.5 trillion, as of 31 December 2018. The REIT returned 34.9% year-to-date.
LMIRT’s recent earnings results showed a 5.8% year-on-year fall in gross rental income, but DPU was up marginally (1.7% year-on-year) from 0.59 to 0.60 Singapore cents.
5. Mapletree Commercial Trust
Mapletree Commercial Trust (SGX: N21U), or MCT, is a REIT that invests in income-producing real estate used primarily for office or retail purposes. MCT’s portfolio consists of five assets with a total net lettable area of 3.9 million square feet, valued at S$7 billion. MCT provided a total return of 30.1% year-to-date.
MCT reported a strong result in its Q1 2020 earnings, with gross revenue rising 3.3% year-on-year and DPU growing 3.6% year-on-year to 2.31 Singapore cents.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Mapletree Commercial Trust. Motley Fool Singapore contributor Royston Yang does not own shares in any of the companies mentioned.