3 Singapore REITs increased their DPUs

SINGAPORE: Real Estate Investment Trusts (REITs) are favoured by income investors for their reliable dividends, as they are mandated to distribute at least 90% of their net profit to pay out.

Additionally, REITs expand their portfolios through acquisitions to enhance their distribution per unit (DPU). According to The Smart Investor, these three Singapore REITs increased their DPUs through strategic acquisitions.

1. Mapletree Logistics Trust

Mapletree Logistics Trust, or MLT, manages an impressive portfolio of 187 properties spread across eight countries, boasting a total asset under management (AUM) of S$13.3 billion as of December 31, 2023.

MLT recently made headlines by acquiring three modern logistics properties in Malaysia and Vietnam. These properties boast a 96% occupancy rate and an initial net property income (NPI) yield of approximately 6.2%.

According to the REIT’s management, the acquisitions are anticipated to boost MLT’s distribution per unit (DPU). In addition, MLT’s aggregate leverage is forecasted to increase from the current 38.8% to 39.6% post-acquisition.

2. Frasers Logistics & Commercial Trust

Frasers Logistics & Commercial Trust, or FLCT, similarly made a strategic move by purchasing an 89.9% stake in a portfolio of four properties in Germany from its sponsor, Frasers Property Limited, at a purchase price of EUR129.5 million (S$188.9 million).

With a total portfolio value of around S$6.7 billion as of December 31, 2023, FLCT’s acquisition move is expected to increase FLCT’s distribution per unit (DPU) and net asset value (NAV).

Post-acquisition, the proportion of logistics & industrial assets in FLCT’s portfolio is projected to rise from 70.3% to 71.1%.

3. Digital Core REIT

Digital Core REIT, or DCR, specialises in data centre assets and manages a portfolio of 12 data centres across various countries.

With a diverse portfolio spanning Germany, Japan, the US, and Canada and an AUM of around US$1.4 billion, DCR is poised to acquire an additional 24.9% interest in a Frankfurt facility from its sponsor, Digital Realty Trust.

This move enhances DCR’s stake in a cutting-edge facility and promises to elevate its DPU by 3.2%.

Additionally, with the facility leased at 92%, there is ample opportunity for future revenue growth, given the strong demand for data centres and limited new supply.

As always, evaluate your risk tolerance before you invest. /TISG

Read also: 4 Singapore REITs with higher dividend yields than CPF OA’s 2.5%