4 REITs That Have Raised Their DPU

·5-min read
Logistics Warehouse with Forklift
Logistics Warehouse with Forklift

REITs went through tough times last year when the pandemic first broke out.

Many had to dole out tenant relief measures to support their tenants.

As a result, these REITs announced lower distributable income as some had to be retained to help their tenants tide over the troubles.

With most of the downturn behind us, REITs are now slowly releasing the amounts held back last year, thereby bumping up their distributable income and distribution per unit (DPU).

As earnings season rolls around again, here are four REITs that have reported an increase in their year on year DPU.

ESR-REIT (SGX: J91U)

ESR-REIT owns a diversified portfolio of 58 industrial properties in Singapore with a total property value of S$3.2 billion as of 30 June 2021.

For its fiscal 2021 half-year (1H2021), the REIT’s gross revenue increased by 5.4% year on year to S$119.8 million.

Net property income (NPI) rose 8.4% year on year to S$87 million, while distributable income jumped 18.7% year on year to S$56.8 million.

The better performance was due to the absence of COVID-19 provisions along with lower property expenses, coupled with a high occupancy rate of 91.7%.

DPU jumped by 14.3% year on year to S$0.01554.

After the earnings release, ESR-REIT announced a preferential offer of 32 for 1,000 units at S$0.40 for each preferential unit.

This exercise will raise gross proceeds of around S$50 million to fund the acquisition of a logistics asset and to partially finance asset enhancement initiatives (AEI) at two properties.

ARA Logos Logistics Trust (SGX: K2LU)

ARA Logos Logistics Trust invests in 29 high-quality logistics warehouses in both Singapore and Australia.

Its portfolio is valued at around S$1.8 billion as of 30 June 2021.

For 1H2021, the REIT’s gross revenue rose by 15.2% year on year to S$66.6 million, boosted by its recent Australian acquisition and the strengthening of the Australian dollar.

NPI increased by 17.1% year on year to S$51.4 million and distributable income jumped by 36.6% year on year to S$34.6 million.

The higher distributable income was due to contributions from the REIT’s investments in the New LAIVS Trust and Oxford Property Fund.

As a result, DPU improved by 10.6% year on year to S$0.0257.

ARA Logos’ aggregate leverage stands at 39.5%, below the central bank’s ceiling of 50%.

Its cost of financing has also fallen to 2.92% for the half-year compared to 3.22% in 2020.

Sabana REIT (SGX: M1GU)

Sabana REIT invests in a portfolio of 18 industrial properties in Singapore that span the high-tech industrial, general industrial, and logistics sectors.

Its portfolio was worth around S$862 million as of 30 June 2021.

Gross revenue for 1H2021 rose 14.1% year on year to S$39.1 million.

NPI climbed by 23.2% year on year to S$25.7 million, while DPU more than tripled year on year from S$0.0047 to S$0.0148.

The sharp jump in DPU was due to 55% of distributable income being retained for the first half of 2020.

During the period, portfolio occupancy stood at 83.4%, with three-quarters of leases expiring this year renewed or replaced by new leases.

Rental reversion was a positive 11.8%.

Sabana REIT’s portfolio value also increased to S$862.2 million due to AEI and rejuvenation works at several properties.

The REIT manager is also strengthening the REIT’s tenant base with more tenants in defensive sectors such as healthcare, data centres, and electronics.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, invests in a diversified portfolio of logistics real estate.

As of 30 June 2021, the REIT’s portfolio comprised 163 properties in countries such as Singapore, Japan and China worth a total of S$10.7 billion.

For its fiscal 2022 first quarter (1Q2022), the REIT reported a 23.7% year on year jump in gross revenue, buoyed by higher revenue from existing properties and contributions from acquisitions during the fiscal year.

NPI increased by 21.3% year on year to S$144.2 million while DPU grew by 5.7% year on year to S$0.02161 due to an enlarged unit base.

The leverage ratio declined slightly to 38.2% from 38.4% three months ago, and the cost of financing remained low at 2.2%.

The occupancy rate for the portfolio also improved slightly to 97.8% on 30 June 2021, up slightly from 97.5% as of 31 March 2021.

It’s Fight Night on 29 July…and you’re invited! Crowd favourites, Keppel DC REIT (SGX: AJBU), Frasers Logistics & Commercial Trust (SGX: BUOU), and DBS (SGX: D05) will fight to the end for the title of “Champion of Dividends.” Be the first to find out who wins in this 3-way mayhem on the 29 July. We’ll host a webinar, and together we’ll analyse each contender’s strengths, weaknesses, and potential. To reserve a front-row ticket to this royal rumble, click HERE now.

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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

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