A majority of Singapore Reits that declared dividend distributions for the financial period ended 30 September 2023 reported a lower distribution per unit (DPU) on year. According to investment advisory platform Beansprout, lower distributions have partly led to weakness in the share price of S-Reits.

Reits have been facing twin headwinds of high inflation along with surging interest rates.

As 10-year US Government Bond yields declined from the highs seen in mid-October, the iEdge S-Reit Index has gained 9.4 per cent total returns, narrowing the year-to-date decline of the index from 9.0 per cent as at Oct 31, 2023 to 0.4 per cent as at Nov 23, 2023.

Despite industry headwinds, three S-Reits have bucked the trend and reported higher year-on-year DPU.

Mapletree Logistics Trust

Mapletree Logistics Trust (MLT) reported that its H1FY2024 gross revenue and net property income (NPI) dipped by 0.7 per cent and 1 per cent respectively to S$368.9 million and S$320.1 million.

Despite the decline, DPU for the period grew 0.5 per cent year on year (yoy) to 4.539 cents.

MLT maintained an occupancy rate of 96.9 per cent but saw its average rental reversion dip to 0.2 per cent from 4.2 per cent in the previous quarter. 

This was largely due its Chinese properties within its portfolio.

However, MLT’s Reit manager continues to be active in capital recycling, with a total of five divestments announced in the second quarter in Malaysia, Singapore and Japan.

MLT also announced two more divestments in early November 2023, a property in Tuas Avenue 3 for S$11.1 million and two properties in Malaysia for RM151.2 million.

ParkwayLife Reit

ParkwayLife Reit (PLife) reported that its 9M2023 gross revenue increased 24.6 per cent yoy to S$110.9 million, boosted by higher rent from a new master lease agreement for its three Singapore hospitals, alongside contributions from the acquisition of five nursing homes in Japan.

PLife’s NPI improved by 26.2 per cent yoy to S$104.5 million, and DPU grew 2.8 per cent yoy to 10.99 cents. PLife recently completed the acquisition of two nursing homes in Japan in October 2023 for around S$16.4 million, which the Reit manager believes will be DPU-accretive.

PLife also intends to build up a third key market as part of its multi-pronged growth platform to grow its asset base and DPU.

Since its initial public offering in 2007, PLife has recorded un-interrupted recurring DPU growth.

Frasers Hospitality Trust

Frasers Hospitality Trust (FHT) reported that its FY2023 gross revenue increased 28.5 per cent yoy to S$123.2 million and NPI grew 30.1 per cent yoy to S$90.5 million, on the back of sustained recovery in global tourism and improved operating environment.

Distribution per stapled security (DPS) surged 49.3 per cent yoy to 2.4426 cents.

FHT’s overall portfolio value grew 1.7 per cent yoy to S$1.93 billion as of Sep 30, 2023. Revenue per available room (RevPAR) growth was also achieved across all country portfolios in FY2023.

RevPAR of all country portfolios have surpassed pre-Covid levels since 9MFY2023, except Japan. FHT’s manager intends to unlock value for unitholders via divestments while scouting for yield-accretive acquisitions to enhance overall returns. 

Source: SGX Research S-Reits & Property Trusts Chartbook.

REIT Watch is a weekly column on The Business Times, read the original version.

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