9 REITs That Reported a Year on Year Rise in DPU

2021-02-24     thesmartinvestor
9 REITs That Reported a Year on Year Rise in DPU

We are less than two months into the new year, and there is already an undeniable feel-good vibe.

The rapid dissemination of the COVID-19 vaccines promises to sharply reduce the spread of the deadly pathogen.

Early indications from data gathered by the UK show that the vaccines are effective in cutting both disease transmission and hospitalisations just by administering the first dose.

Should the global situation improve, countries may eventually ease the tough restrictions placed on travel and movement.

Such measures will, in turn, benefit REITs as their tenants will see an improvement in business conditions.

Last month, we featured five REITs that reported a year on year rise in distribution per unit (DPU).

Today, we are adding another four REITs that have increased their DPU amid difficult conditions.

Keppel Pacific Oak US REIT (SGX: CMOU)

Keppel Pacific Oak US REIT, or KORE, is a REIT that invests in income-producing commercial assets in the US.

Its portfolio consists of 13 freehold office buildings and business campuses spread out over eight markets with a total value of US$1.3 billion.

For the fiscal year 2020, KORE reported a 13.6% year on year rise in gross revenue.

Net property income (NPI) increased by 11% year on year to US$83 million.

Distributable income rose 15.4% year on year to US$58.6 million, and DPU inched up 3.7% year on year to S$0.0623.

The increases were due to contribution from One Twenty Five, a property acquired in November 2019, as well as higher rental income from other properties within the portfolio.

Mapletree Industrial Trust (SGX: ME8U)

Mapletree Industrial Trust, or MIT, holds a portfolio consisting of 84 properties in Singapore and 27 properties in the US.

The portfolio was valued at S$6.6 billion as of 31 December 2020 and comprised a mix of data centres, business parks and flatted factories used for industrial purposes.

For its fiscal 2021 third quarter, MIT reported a 20.5% year on year surge in gross revenue. This increase was mainly contributed by revenue from 14 data centres that were acquired in June last year.

NPI was 20.8% higher year on year while distributable income improved by 16.8% year on year to S$81.1 million.

DPU climbed by 3.8% year on year to S$0.0328.

Further reliefs to be doled out to tenants to help them tide over this crisis in fiscal 2021’s fourth quarter may impact distributable income for the full fiscal year.

Lendlease Global Commercial REIT (SGX: JYEU)

Lendlease Global Commercial REIT invests in properties that are used for retail and/or office purposes.

The REIT currently owns just two properties: a leasehold interest in 313 Somerset, a prime retail mall in Singapore; and a freehold interest in Sky Complex, which consists of three Grade A office buildings in Milan, Italy.

These two assets have an appraised value of around S$1.4 billion as of end-2020.

Besides, the REIT also acquired a 5% stake in Jem, an integrated retail and office development in Singapore.

For its fiscal 2021 first half ended 31 December 2020, the REIT’s gross revenue inched up 3.2% year on year.

NPI rose by 1.6% year on year while distributable income increased by 1.4% year on year to S$27.5 million.

DPU increased slightly by 0.8% year on year to S$0.0234.

The REIT is positioning its Somerset asset for the future as it plans to launch targeted marketing campaigns to boost sales and footfall.

The manager is also exploring organic initiatives to enhance value for unitholders and is looking out for suitable high-quality assets to acquire.

Keppel DC REIT (SGX: AJBU)

Keppel DC REIT is a data centre REIT with a portfolio comprising 19 assets across eight countries, valued at S$3 billion.

The REIT recently released its full-year 2020 earnings.

Gross revenue surged 36.3% year on year while NPI rose 37.7% year on year.

DPU increased by 20.5% year on year to S$0.0917.

The REIT is working on several asset enhancement initiatives that are slated for completion in the first half of 2021.

Demand for data centres remains strong as the pandemic has caused a surge in data usage as people and businesses shift online.

Looking ahead, enterprise spending on cloud infrastructure is expected to grow by 22% annually over the next five years, underpinned by continued strong demand for data centres.

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Disclaimer: Royston Yang owns shares in Keppel DC REIT.

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