4 Singapore REITs Yielding More Than 4%
October 6, 2021
In Singapore, the starting point for many local investors – who want to buy dividend stocks listed here – tends to be the real estate investment trust (REIT) space.
That’s because Singapore has grown itself into a REITs centre of sorts, with over 40 REITs listed in the “Lion City”.
Furthermore, investors here are comfortable investing in property-related assets, given the reliable nature of REITs and their predictable tax-free income via dividends.
So, with the talk of an imminent crash that’s always present, it’s a timely reminder that REITs provide the comfort of a steady dividend and less volatile asset price swings during these periods when markets sell off.
Additionally, while the US 10-Year Treasury Yield is higher at over 1.5%, it’s still well below what a lot of these Singapore REITs are yielding.
So, with that, here are four Singapore REITs yielding over 4% that long-term dividend investors can consider buying.
1. Frasers Centrepoint Trust
Frasers Centrepoint Trust (SGX: J69U), also known as FCT, is a large-cap retail REIT that’s focused purely on Singapore properties.
It owns nine retail malls in the “Heartlands” of Singapore. These include well-recognised malls such as Causeway Point, Waterway Point, Tampines 1, and Changi City Point, to name just a few.
As a mall that’s focused more in the residential areas of Singapore, meeting the daily needs of citizens, it has suffered less than the retail malls focused on tourist traffic, such as those on Orchard Road.
Its latest third-quarter fiscal year (FY) 2021 earnings (for the three months ending 30 June 2021) saw stable retail portfolio occupancy at its properties of 96.4%.
This came despite shopper traffic dropping during the quarter, to around 60% of the pre-Covid level, given the implementation of Phase 2 (HA) measures.
With a gearing level of only 33.9%, versus the MAS ceiling of 50%, the REIT has plenty of firepower to add to its portfolio.
FCT’s distribution per unit (DPU) of 5.996 Singapore cents in the first half of FY 2021 means that it now offers investors a forward 12-month yield of 5.3% based on its unit price of S$2.24.
2. Mapletree Industrial Trust
Second is Mapletree Industrial Trust (SGX: ME8U), a Mapletree Investment Pte-backed REIT that owns 114 properties across Singapore and North America that are worth a combined S$6.7 billion.
It operates many of its most lucrative properties in the data centre space, particularly in North America, where demand for data storage in the cloud is surging.
Mapletree Industrial’s latest earnings, for its first-quarter FY 21/22, were positive. Distributable income was up 17.2% year-on-year to S$82.7 million while its DPU also rose to 3.35 Singapore cents – up 16.7% year-on-year.
A sizeable US$1.32 billion acquisition of 29 data centres in the US was also completed towards the end of the quarter. That should give Mapletree Industrial more room to grow its income from its portfolio and, hence, distributions too.
Based on its most recent price of S$2.71, Mapletree Industrial Trust units give investors a 12-month forward dividend yield of 4.9%.
3. Mapletree Logistics Trust
Third on the list is Mapletree Logistics Trust (SGX: M44U), or MLT. It’s an Asia-focused logistics REIT that first listed in Singapore back in 2005.
Its portfolio consists of 163 properties that stretch across Singapore, Hong Kong, Japan, China, Australia, South Korea, Malaysia, Vietnam, and India, as of the end of June 2021.
Total occupancy in its latest first-quarter FY 21/22 reached a respectable 97.8% as many of its tenants are involved in the logistics and e-commerce business, both of which have thrived during the Covid-19 pandemic.
MLT’s latest DPU of 2.161 Singapore cents was up 5.7% year-on-year from the same period in 2020.
With a unit price of around S$1.96, Mapletree Logistics Trust units are offering investors a yield of 4.4% on a 12-month forward basis.
4. Sasseur REIT
Finally, there is the Chinese premium mall outlet owner and operator Sasseur REIT (SGX: CRPU). It owns four outlet malls in China; Kunming, Chongqing Bishan, Chongqing Liangjiang, and Hefei.
Sasseur has managed to recover amid the bounce back in Chinese consumer sentiment over the past year. For its latest second-quarter 2021 earnings, Sasseur REIT saw distributable income rise 19.7% year-on-year to S$21.7 million.
This allowed the REIT to raise its DPU by 6.7% year-on-year to 1.614 Singapore cents. With a gearing ratio of only 27.8%, it’s also one of the leased levered REITs listed in Singapore – giving it a lot of headroom for further acquisitions.
Based on Sasseur REIT’s latest unit price of S$0.82, it offers investors a 12-month forward dividend yield of 7.9%.
Look for the income
Whether in good times or in bad, it can be prudent to have a certain allocation to income-paying REITs.
As the US 10-Year Treasury Yield rises, it doesn’t necessarily spell bad news for REITs as the “spread” is still attractive.
So, for long-term investors looking to generate dividend income, Frasers Centrepoint Trust, Mapletree Industrial Trust, Mapletree Logistics Trust and Sasseur REIT could be worth adding to your watchlist.
Disclaimer: ProsperUs Head of Content Tim Phillips owns shares of Mapletree Industrial Trust and Mapletree Logistics Trust.
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.