Singapore real estate investment trusts, also known as S-REITs, have been gaining significant traction over the past month as we near the end of the interest rate hike cycle.
As the risk of a potential recession mounts, S-REITs are emerging as an attractive investment alternative for investors aiming to enhance their income and diversify their portfolios.
A key strategy for dividend investors to consider involves focusing on the growth of the distribution per unit (DPU), a powerful indicator of potential income, performance, and reliability.
So, for investors who want sustainable, and rising, passive income here are three S-REITs that have successfully expanded their DPU in the challenging economic landscape of the past year.
1. Keppel DC REIT
Keppel DC REIT (SGX: AJBU) had been a solid performer, with a portfolio of 23 data centres across nine countries, valued at S$3.7 billion as of Q1 2023.
The REIT’s gross revenue and net property income (NPI) saw respective increases of 6.5% and 6.3% year-on-year (yoy), reaching S$70.4 million and S$63.9 million.
The strong performance lead to an increase in its DPU.
Keppel DC REIT’s DPU for the quarter was 3.0% higher yoy at 2.541 Singapore cents, driven by a 4.1% yoy increase in distributable income to $46.3 million.
2. Parkway Life REIT
Parkway Life REIT (SGX: C2PU), a healthcare REIT, witnessed a substantial improvement in its gross revenue and NPI by 21.7% and 23.5% yoy, respectively, for Q1 FY2023.
In line with the stronger financial performance, Parkway Life REIT’s DPU for the quarter also increased by 2.5% yoy to 3.65 Singapore cents.
3. Mapletree Logistics Trust
Mapletree Logistics Trust (SGX: M44U) reported a 7.7% rise in gross revenue for FY2023, with NPI increasing by 7.2% year on year.
The logistics REIT also announced a string of positive operating metrics for FY2023, including a high portfolio occupancy and a revaluation gain of S$224.2 million.
The strong performance has helped Mapletree Logistics Trust to increase its DPU by 2.5% yoy to 9.011 Singapore cents in FY2023.
Invest in S-REITs that have demonstrated strong track record
S-REITs have demonstrated resilience and growth despite of the challenging economic environment, showcasing their potential as a beneficial addition to investors’ portfolios.
By investing in S-REITs that are able to grow their DPUs consistently, investors will be able to protect their portfolio from volatile markets.
The impressive results shown by the three S-REITs mentioned here underscore their strong potential for future growth, reinforcing S-REITs’ standing as an attractive investment vehicle.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
