5 REITs That Raised Their Year-on-Year DPU

2021-04-27     thesmartinvestor
5 REITs That Raised Their Year-on-Year DPU

As the world welcomes a nascent recovery this year, REITs are reporting healthier numbers.

Many REITs have begun reporting their first-quarter 2021 numbers.

After 2020 saw multiple REITs reduce their DPU, for the start of 2021, REITs are announcing increases in their distribution per unit (DPU).

The latest results should provide a boost to this belief as many of the stronger REITs have demonstrated resilience despite the adversity.

Here are five REITs that reported a higher year on year DPU.

Keppel DC REIT (SGX: AJBU)

Keppel DC REIT is a data-centre focused REIT with a portfolio of 19 data centres valued at S$3 billion as of 31 December 2020.

For its first quarter of 2021 (1Q2021) earnings, the REIT reported a 10.6% year on year increase in gross revenue to S$66.7 million.

This increase was contributed by new acquisitions and asset enhancement initiatives (AEI) conducted in 2020.

Net property income (NPI) rose 10% year on year while distributable income jumped by 17.5% year on year to S$42 million.

DPU jumped by 18.1% year on year to S$0.02462. Annualised DPU stands at S$0.09848 and the REIT’s shares offer an annualised 12-month dividend yield of 3.6%.

Keppel DC REIT expects data centre demand to remain resilient as global internet traffic surged 47% year on year in 2020.

Enterprise spending on cloud infrastructure grew by more than 30% last year and is expected to grow by more than 20% per year through 2025, underpinning continued strong demand for data centres.

ESR-REIT (SGX: J91U)

ESR-REIT is an industrial REIT that owns a diversified portfolio of 57 properties in Singapore.

These properties were valued at around S$3.1 billion as of 31 December 2020 and consisted of a mix of business parks, logistics and general industrial properties.

For its 1Q2021 business update, the REIT reported that gross revenue inched up by 4.4% year on year as no provision was made for rental rebates to tenants this quarter.

NPI rose 7.6% year on year to S$44.1 million due to lower property expenses.

Core DPU increased by 14.8% year on year to S$0.008, bringing annualised DPU to S$0.032.

Annualised 12-month dividend yield stands at 7.6%.

Frasers Centrepoint Trust (SGX: J69U)

Frasers Centrepoint Trust, or FCT, is a retail REIT that owns a portfolio of 10 suburban retail malls and an office building in Singapore.

Its retail portfolio takes up around 2.3 million square feet of net lettable area and total assets under management (AUM) stood at S$6.4 billion as of 31 December 2020.

For the REIT’s fiscal 2021 first half (1H2021) ended 31 March 2021, gross revenue surged by 73.8% year on year to S$173.6 million.

The increase was due to the acquisition of the AsiaRetail Funds’ portfolio of five malls completed in October last year.

NPI also increased by 73.8% year on year while DPU was up by 28.4% year on year to S$0.05996.

FCT reported a sustained recovery in tenant sales for its malls for both January and February this year, up 0.4% and 11.7% year on year, respectively.

Parkway Life REIT (SGX: C2PU)

Parkway Life REIT is a healthcare REIT that owns a portfolio of 53 properties worth close to S$2 billion as of 31 December 2020.

Three of these properties are hospitals in Singapore with another 49 private nursing homes in Japan.

For its 1Q2021 earnings, the REIT reported a slight 0.4% year on year increase in gross revenue.

NPI inched up 1% year on year to S$28 million, while DPU increased by 7.4% year on year to S$0.0357.

The increase in DPU was contributed by the acquisition of a Japanese nursing home in December last year and the absence of COVID-19 relief measures for tenants.

The REIT enjoys a very low cost of debt of 0.55% per annum and its gearing level stood at 37.8% as of 31 March 2021.

Suntec REIT (SGX: T82U)

Suntec REIT, one of Singapore’s oldest REITs, holds a portfolio of both retail and commercial assets in Singapore, Australia and the UK.

Its 1Q2021 results showed gross revenue inching up 0.2% year on year to S$87.1 million.

NPI improved by 10.2% year on year to S$59.5 million.

The better performance was contributed by Suntec REIT’s resilient office portfolio in Australia and recovery in retail spending at Suntec City Mall.

DPU increased by 16.2% year on year to S$0.02045 due to higher contributions from its portfolio and the absence of retention sums related to the pandemic.

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Disclaimer: Royston Yang owns shares in Keppel DC REIT and Suntec REIT.

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