Love Dividends? 5 Singapore REITs Yielding Over 5%

Dividend cut yield

Tim Phillips

June 14, 2022

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It’s not exactly a secret that Singapore’s real estate investment trusts (REITs) are a favourite option for local dividend investors.

That’s down to a number of reasons; tax-free dividends, the high price of physical property in Singapore, and the ability to buy into property investments with a relatively smaller capital outlay.

With inflation at record highs and stocks markets in the US falling hard into bear market territory, buying into REITs has become de rigueur for a lot of investors.

That’s because while REIT prices are still down so far in 2022, they’re at least outperforming the broader S&P 500 Index. In addition, you’re guaranteed an income stream while REITs can also provide a hedge against inflation.

So, where are the opportunities in Singapore’s REIT market? Fortunately for investors, there are plenty of places to look.

Here are five REITs listed on the SGX that offer dividend investors a yield north of 5%.

1. Mapletree Logistics Trust – 5.5%

Mapletree Logistics Trust (SGX: M44U) is a large-cap pan-Asian logistics REIT that has 183 properties across Singapore, Australia, China, Hong Kong, India, Japan, Malaysia, South Korea, and Vietnam.

These properties were worth a combined S$13.1 billion as of 31 March 2022, a 21.1% year-on-year increase.

The REIT was busy during FY21/22 (for the 12 months ending 31 March 2022) in terms of acquisitions, as it purchased 24 properties; 13 in China, three in Vietnam, three in Malaysia, two in South Korea and one each in Singapore, Japan and Australia.

All this allowed Mapletree Logistics Trust to post net profit income (NPI) of S$592.1 million in FY21/22, up 18.6% year-on-year.

That also contributed to a 5.5% hike in its all-important distribution per unit (DPU) to 8.787 Singapore cents for FY 21/22.

With its latest quarterly Q4 FY21/22 DPU of 2.268 Singapore cents, Mapletree Logistics Trust is offering investors a 12-month forward dividend yield of 5.5%.

2. Frasers Centrepoint Trust – 5.5%

Next up we have Heartlands suburban malls heavyweight Frasers Centrepoint Trust (SGX: J69U). It’s primarily a Singapore play on retail real estate as it owns nine retail malls, including the likes of Causeway Point, Hougang Mall, and Changi City Point.

The REIT also has one office property; Central Plaza. During the pandemic, its suburban properties held up better than REITs which had retail properties in Singapore’s CBD, such as CapitaLand Integrated Commercial Trust (SGX: C2PU).

For the REIT’s H1 FY2022 (for the six months ending 31 March 2022), Frasers Centrepoint Trust saw its retail portfolio’s committed occupancy improve by 0.6% quarter-on-quarter to 97.8%.

Meanwhile, its NPI saw a 3.8% year-on-year rise to S$130.48 million. As NPI margins continue to improve, and people start dining and shopping out again, the REIT should continue to see a solid recovery.

With a H1 FY2022 DPU of 6.136 Singapore cents, Frasers Centrepoint Trust give investors a 12-month forward dividend yield of 5.5%.

3. Sasseur REIT – 9.2%

For anyone who wants China REIT exposure, then outlet shopping mall owner Sasseur REIT (SGX: CRPU) is an ideal option.

Sasseur REIT owns four premium outlet malls in China; two in Chongqing, one in Hefei, and one in Kunming.

Portfolio occupancy edged up in its latest first quarter, up to 95.4% – an improvement from the 94.4% occupancy rate in Q2 2021.

Furthermore, the REIT has been a consistent dividend payer since its listing in March 2018. Its latest quarter also saw an 3.6% year-on-year hike in its DPU to 1.822 Singapore cents (see below).

Sasseur REIT dividends

Source: Sasseur REIT Q1 2022 investor presentation

With a 12-month forward dividend yield of a robust 9.2% (and one of the few Singapore REITs remaining that pay a quarterly dividend), Sasseur REIT can provide investors with a high-yielding way to gain exposure to China real estate.

4. Mapletree Industrial Trust – 5.7%

Next up is the reliable industrial and data centre REIT Mapletree Industrial Trust (SGX: ME8U).

With over half of its assets under management (AUM) now classified as data centres, Mapletree Industrial Trust has successfully executed a pivot over the past five years from traditional industrial properties to “new economy” assets such as data centres.

Owning 143 properties as of 31 March 2022, Mapletree Industrial saw its FY21/22 DPU (for the 12 months ending 31 March 2022) hit 13.8 Singapore cents – which was up 10% year-on-year.

With its occupancy rate improving slightly quarter-on-quarter during its latest quarter, rising to 94.0%, Mapletree Industrial still foresees strong demand for data centre space in select markets within the US.

Offering investors a solid 12-month forward dividend yield of 5.7%, Mapletree Industrial Trust is one of the most consistent and reliable REITs around in Singapore.

5. Frasers Logistics & Commercial Trust – 6.0%

Finally, we have industrial heavyweight Frasers & Logistics Commercial Trust (SGX: BUOU), also known as “FLCT”.

The REIT gives investors mainly exposure to industrial and logistics through the 94 properties that it owns in the sector. However, FLCT also has seven commercial properties.

These properties are located in Singapore, Australia, the UK, Germany, and the Netherlands.

As of the end of March, FLCT had a healthy portfolio occupancy rate of 96.1% although this masks a 100% portfolio occupancy rate for it logistics & industrial portfolio.

That was partially offset by a 90.5% occupancy rate for its commercial portfolio. Overall, its other fundamentals look solid; it has a weighted average lease expiry (WALE) of 4.6 years, a low gearing ratio of 33.1% and debt headroom of around S$2.6 billion.

With its most recent H1 FY2022 DPU of 3.85 Singapore cents, FLCT shares give investors an attractive 12-month forward dividend yield of 6.0%.

Dividends in times of uncertainty

For investors, it’s important to remember that dividend-paying stocks can provide some buffer to our portfolios.

In that sense, REITs in Singapore are a valid option to ensure that there are regular income streams. With the above five REITs listed on the SGX, local investors can buy into solid portfolios of properties at very attractive dividend yields.

 

Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips owns shares of Mapletree Industrial Trust and Mapletree Logistics Trust.

About the Author: Tim Phillips

Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth. He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer. In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.