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Real estate investment trusts, or “REITs” for short, are often popular among income investors due to their stable earnings qualities. In addition to stable income, picking the right REITs can provide investors with consistent growth as their earnings, as well as distributions per unit (DPU), increase over time. In this article, I’ll look at two REITs that have grown their DPU lately.
REIT No. 1
We will start with Mapletree Commerical Trust (SGX: N2IU). As a quick introduction, Mapletree Commerical is an owner of five assets in Singapore, namely, VivoCity, MBC I, PSA Building, Mapletree Anson and Merrill Lynch HarbourFront. These five assets have a total net lettable area (NLA) of 3.8 million square feet with a total value of S$7.35 billion (US$5.4 billion).
For the quarter ended 30 September 2019, Mapletree Commerical reported that DPU grew 2.2% year-on-year to 2.32 Singapore cents. The higher DPU came on the back of a better performance. Gross revenue grew by 1.9% year-on-year to S$112.04 million which resulted in an uptick in net property income which improved by 1.7% to S$87.7 million.
The REIT is also in the midst of acquiring Mapletree Business Centre (MBC) II, for which it launched a rights issue. The acquisition should be completed before the end of 2019.
At its current price of S$2.36 (as of the time of writing), Mapletree Commerical Trust has an annualised distribution yield of 3.9%.
REIT No. 2
CapitaLand Mall Trust (SGX: C38U), or CMT, is the second REIT. As a brief introduction, CMT is the largest retail REIT in Singapore by market capitalisation and is managed by CapitaLand Limited (SGX: C31). The REIT has ownership of 15 retail properties in Singapore and an 11.2% interest in CapitaLand Retail China Trust (SGX: AU8U).
Similar to Mapletree Commercial, CMT had a solid quarter recently. For the quarter ended 30 September 2019, CMT grew its DPU by 4.8% year-on-year to 3.06 Singapore cents. The higher DPU came as a result of growth in gross revenue which increased by 17.9% year-on-year to S$201.1 million while net property income (NPI) expanded by 17.6% during the period to S$144.2 million.
At its current price of S$2.62 (as of the time of writing), CMT has an annualised distribution yield of 4.6%.
So, here we have two Singapore REITs that I believe provide international investors with a stable and growing income that investors can enjoy well into the future.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Saket Jhajharia owns shares in Mapletree Commerical Trust and Capitaland Mall Trust.