5 High-Yielding Singapore REITs Backed by Strong Sponsors

For many Singaporeans, investing centres around the pursuit of dividends, which enable them to earn regular, passive income.

Among the various asset classes, Singapore’s Real Estate Investment Trusts (SREITs) are a favourite for their high distribution yields.

The SGX Research Chartbook for SREITs & Property Trusts, as of March 2024, reveals that the average distribution yield for 41 S-REITs and property trusts stands at an impressive 7.3%.

This figure is higher than the yield offered by the STI Index at 5.3%, and the Monetary Authority of Singapore’s (MAS) Benchmark 10-Year Government Bond at 3.1%.

What makes a good REIT?

For starters, having a strong sponsor helps.

The following list presents five REITs with substantial yields that are supported by reputable sponsors.

1. CapitaLand Ascendas REIT (SGX: A17U)

CapitaLand Ascendas REIT (CLAR) is our city state’s first and largest business space and industrial REIT.

This REIT is backed by CapitaLand Investment Limited (SGX: 9CI), a prominent real estate investment management company with a significant presence in Asia and a global reach.

As of the end of December 2023, CLAR boasts ownership of an impressive portfolio consisting of 232 properties valued at S$16.9 billion.

These properties are diversified across three key sectors, namely Business Space and Life Sciences, Logistics, and Industrial and Data Centres.

The REIT’s assets are centred around Singapore, the United States, Australia, and Europe.

The fiscal year 2023 (FY2023) saw CLAR’s gross revenue climb by 9.4% compared to the previous year, reaching almost S$1.480 billion.

This growth was attributed to strategic acquisitions completed within the year, alongside the full-year contributions from properties acquired in the preceding fiscal year, coupled with an increase in occupancy rates and positive rental revisions within its Singapore portfolio.

Despite facing higher utility costs and property taxes in Singapore, the REIT’s net property income still managed to record a 5.6% year-on-year increase.

To top it off, distribution per unit (DPU) for FY2023 was at S$0.1516.

With the REIT’s units trading at S$2.60, it offers investors a yield of 5.8%.

2. CapitaLand Integrated Commercial Trust (SGX: C38U)

CapitaLand Integrated Commercial Trust (CICT) is the largest REIT registered on the Singapore Exchange Securities Trading Limited, boasting a market cap of S$13.7 billion as of the end of December 2023.

Similar to CLAR, the REIT benefits from the backing of CapitaLand Investment Limited as its sponsor.

Specialising in the investment of premium, revenue-generating assets primarily designated for commercial use (encompassing both retail and office spaces), CICT mainly operates within Singapore.

The REIT’s portfolio includes 21 properties in Singapore, along with two in Frankfurt, Germany, and three in Sydney, Australia, valued at S$24.5 billion, as of 31 December 2023.

For the fiscal year 2023 (FY2023), CICT saw a significant uptick in its financial performance.

Gross revenue increased by 8.2% year on year to nearly S$1.560 billion, while net property income saw a rise of 7% year on year to around S$1.12 billion.

These gains were primarily fuelled by an enhanced contribution from Raffles City Singapore and the annualised gains from acquisitions completed in the previous year.

That said, this increase was partially offset by an rise in finance charges resulting from borrowings taken up for its 2022 acquisitions, alongside an uptick in interest rates.

The REIT declared a DPU of S$0.1075 for FY2023.

When evaluated against its current trading price of S$1.96, this translates to a distribution yield of 5.5%.

3. Frasers Centrepoint Trust (SGX: J69U)

Frasers Centrepoint Trust (FCT) is one of the largest owners of suburban retail malls in Singapore, managing assets valued at about S$6.9 billion.

The REIT benefits from the backing of Frasers Property Limited (SGX: TQ5), a global player in the real estate sector, engaging in investment, development, and management across the entire spectrum of property services.

At the end of fiscal year ended 30 September 2023 (FY2023), the REIT’s portfolio included 10 retail malls and one office building.

All assets are strategically situated in Singapore’s suburban areas, close to residential zones, and easily accessible via public transport.

FY2023’s gross revenue saw a 3.6% year on year increase to almost S$370 million.

This growth can be credited to higher gross rental income driven by higher occupancy rates along with increased rents for new and renewed leases and variable rent structures across the majority of its malls.

There was also a rise in atrium income following the resumption of events from 29 March 2022.

Net property income witnessed a growth of 2.7% year on year, reaching S$265.6 million.

The REIT declared a DPU of S$0.1215 for FY2023. With the current market price of S$2.15 per share, this translates to a yield of 5.7%.

4. Mapletree Industrial Trust (SGX: ME8U)

Mapletree Industrial Trust (MIT) manages a diverse portfolio comprising primarily industrial assets in Singapore and data centres in North America and Japan.

The REIT is backed by Mapletree Investments Pte Ltd, which owns and operates properties across various sectors including office, retail, logistics, industrial, residential, and student housing, with a total value exceeding S$77 billion as of 31 March 2023.

MIT’s portfolio comprises 56 properties in North America, among them 13 data centres via a joint venture with its sponsor, alongside 83 properties in Singapore, and one in Osaka, Japan, with its total assets under management at S$8.9 billion.

For the fiscal year ending 31 March 2024 (FY23/24), MIT reported a slight increase in gross revenue of 1.8% to over S$697 million.

This rise is attributed to the addition of Mapletree Hi-Tech Park @ Kallang Way, gains from a newly acquired data centre in Osaka, Japan, and various new leases and renewals throughout its portfolio.

Despite these gains, an increase in property operating expenses by 5.6%, arising from higher costs for property maintenance, taxes, and marketing, resulted in a modest 0.6% rise in net property income, reaching S$521 million.

MIT announced a DPU of S$0.1343 for FY23/24, equating to a yield of just under 6% based on its current trading price of S$2.25 per share.

5. Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust (MLT) was Singapore’s first Asia-focused logistics REIT when it made its debut on the Singapore Exchange in July 2005.

Sponsored by Mapletree Investments Pte Ltd, the same entity behind MIT, Mapletree Investments invests in a diverse portfolio of income-generating logistics real estate and related assets.

The REIT’s extensive portfolio includes 187 properties across Singapore, Australia, China, Hong Kong SAR, India, Japan, Malaysia, South Korea, and Vietnam, boasting a total asset management value of S$13.2 billion.

In the fiscal year ending 31 March 2024 (FY23/24), MLT saw a modest 0.4% year on year gain in gross revenue.

This growth primarily stemmed from an increase in contributions from its existing properties in Singapore and Hong Kong, along with revenue contributions from newly acquired properties in Japan, South Korea, and Australia, all completed in FY23/24’s first quarter.

Despite the increase, a 3.2% rise in property operating expenses, due to the recent acquisitions, increased property taxes, and maintenance costs, resulted in net property income being flat compared to the previous fiscal year.

MLT declared a DPU of S$0.9003 cents for FY23/24. With its current trading price at S$1.34 per share, this DPU represents a yield of 6.7%.

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Disclaimer: Lim Jun Yuan owns shares of CapitaLand Ascendas REIT, CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Mapletree Industrial Trust, and Mapletree Logistics Trust.

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