4 Singapore REITs I Will Buy with S$30,000

An earlier version of the article appeared on The Smart Investor website.

When investing, it’s useful to keep some spare cash lying around.

With both the NASDAQ Composite Index and S&P 500 falling into a bear market, many stocks are getting cheaper as a result.

Over in Singapore, the weak sentiment, along with rising interest rates, have pushed down the prices of many REITs.

Yet, the strong REITs have proven time and again that they can continue to generate a stream of passive income through dividends.

You can take advantage of the fall in REIT prices to scoop up units at attractive distribution yields.

If I had S$30,000 to spare, here are four REITs that I will allocate that money.

Frasers Logistics & Commercial Trust (SGX: BUOU)

Frasers Logistics & Commercial Trust, or FLCT, is an industrial and commercial REIT that owns 102 properties spread across five countries – Singapore, Australia, the UK, Germany and the Netherlands.

Its assets under management stood at S$6.7 billion as of 31 March 2022.

FLCT recently declared and paid out a distribution per unit of S$0.0385 for its fiscal 2022’s first half (1H2022) ended 31 March 2022.

The trailing 12-month distribution yield stands at 4.6%.

The REIT has maintained a high occupancy rate of 96.1% with a long weighted average lease expiry (WALE) of 4.6 years.

Aggregate leverage will fall to 29.5% post-repayment of borrowings, setting FLCT up for sufficient debt headroom to make more yield-accretive acquisitions.

The REIT announced two acquisitions last month – the acquisition of three freehold logistics and industrial properties in Victoria, Australia, and the purchase of a freehold logistics development in Cheshire, the UK.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, owns a portfolio of 183 properties in eight countries with an AUM of S$13.1 billion as of 31 March 2022.

The logistics-focused REIT reported a respectable set of earnings for its fiscal 2022 ended 31 March 2022 (FY2022).

Gross revenue climbed 20.9% year on year to S$678.6 million while net property income (NPI) increased by 18.6% year on year to S$592.1 million.

DPU inched up 5.5% year on year to S$0.08787, giving the units a trailing distribution yield of 5%.

MLT’s aggregate leverage stood at 36.8% with a low cost of debt of 2.2%.

The REIT also enjoys a high occupancy rate of 96.7% and also reported a 2.9% increase in its average rental reversion.

MLT has demonstrated a strong track record of acquisitions – the REIT had made a total of eight acquisitions in FY2022.

Investors can look forward to more acquisitions for FY2023 as the REIT positions itself for further growth.

CapitaLand China Trust (SGX: AU8U)

CapitaLand China Trust, or CLCT, is the largest China-focused Singapore REIT with an AUM of RMB 24.8 billion as of 31 December 2021.

The REIT’s portfolio comprises 11 retail properties, five business parks and four logistics parks located in 12 cities within China.

For FY2021, CLCT reported a DPU of S$0.0873, giving its units a trailing distribution yield of 7.7%.

For the first quarter of 2022 (1Q2022), gross revenue jumped 24% year on year to RMB 489.9 million, driven by full contributions from business parks and new contributions from the logistics parks.

NPI improved by 30.4% year on year to RMB 344.5 million.

Gearing remains reasonable at 38.1% as of 31 March 2022 with an average cost of debt of 2.64%.

CLCT is backed by a strong sponsor in CapitaLand Investment Limited (SGX: 9CI), which provides an acquisition pipeline for the REIT to continue growing its AUM.

As of 31 December 2021, the sponsor owned 12 retail assets, 29 commercial and integrated developments, and eight new economy assets (read: industrial, logistics and business parks) that can potentially be injected into CLCT.

Keppel DC REIT (SGX: AJBU)

Keppel DC REIT is a data centre REIT that owns a portfolio of 21 data centres across nine countries with an AUM of S$3.5 billion as of 31 March 2022.

The REIT reported that gross revenue for 1Q2022 dipped 0.9% year on year to S$66.1 million while NPI fell by 1.4% year on year to S$60.1 million.

However, DPU edged up 0.2% year on year to S$0.02466. Prospective distribution yield stands at 5% for its units.

Keppel DC REIT recently acquired its second data centre in London for S$104 million which will bump up DPU.

The REIT also purchased two data centres in Guangdong, China, for around S$297 million which will see DPU rise by 2.7%.

Keppel DC REIT still has around S$2 billion worth of potential data centre acquisitions from its sponsor Keppel Corporation Limited (SGX: BN4).

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This article was written by Royston Yang at The Smart Investor.

Disclaimer: Royston Yang owns shares of Keppel DC REIT and Frasers Logistics & Commercial Trust.