3 Singapore REITs with dividend yields above 6%. Are they a good buy?

What happened?

REIT investors must have breathed a sigh of relief last month as the US Federal Reserve made its first interest rate cut in four years.

Earlier, I shared how Singapore REITs may benefit with the cut in interest rates. In particular, REITs may see a recovery in their dividends as cost pressures ease.

However, some investors in the Beansprout community have shared that it is hard to find Singapore REITs that continue to offer good dividends, as their share prices have bounced significantly in recent months. 

Hence, I decided to look for Singapore REITs with strong sponsors that are offering dividend yields of 6% or higher.

In this post, I will be diving deeper into Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, and CapitaLand Ascott Trust to find out if they are worth looking at for income investors. 

3 Singapore REITs with dividend yields above 6%

#1 – Mapletree Pan Asia Commercial Trust (SGX: N2IU.SI)

Mapletree Pan Asia Commercial Trust, or MPACT, is a retail and commercial REIT with 17 properties spread across Singapore (4), Hong Kong (1), China (2), Japan (9), and South Korea (1).

These properties have a total net lettable area (NLA) of 10.8 million square feet and are valued at S$15.7 billion as of 31 March 2024.

Mapletree Pan Asia Commercial Trust has a strong sponsor in Mapletree Investments Pte Ltd which helps to provide the REIT with financial support during a crisis while ensuring it has a ready pipeline of assets that can be acquired.

Mapletree Investments Pte Ltd is a global real estate development company that owns and manages S$77.5 billion of properties as of 31 March 2024.

Mapletree Pan Asia Commercial Trust announced a mixed set of earnings for the first quarter of fiscal 2025 (1Q FY2025) ending 30 June 2024.

Portfolio committed occupancy stood high at 94% and the portfolio also reported a positive rental reversion of 5.2% for the quarter.

However, both of MPACT’s key retail assets, VivoCity and Festival Walk, saw year-on-year declines in tenant sales and shopper traffic.

Management attributed this fall to increased outbound travel as borders reopened after the pandemic.

Gross revenue slipped by 0.2% year on year to S$236.7 million but net property income (NPI) inched up 0.1% year on year to S$179.4 million.

VivoCity is undergoing a phased upgrading as part of an asset enhancement initiative (see above).

Basement 2 will see its food kiosks increase from 21 to 24 while NLA will increase by 14,000 square feet through space reconfiguration and conversion of car park space.

These renovations are expected to be completed by the end of next year.

DPU fell by 4.1% year on year to S$0.0209 because of a 9.8% year-on-year increase in finance costs.

Mapletree Pan Asia Commercial Trust's trailing 12-month distribution per unit stood at S$0.0882, giving its units a trailing dividend yield of 6.1%.

Find out how much dividends you would have received as a shareholder of Mapletree Pan Asia Commercial Trust in the past 12 months with the calculator below.  

Learn more about Mapletree Pan Asia Commercial Trust dividend history and dividend payment dates 

#2 – Mapletree Logistics Trust (SGX: M44U.SI)

Mapletree Logistics Trust, or MLT, is a logistics-focused REIT with a portfolio of 188 properties spanning eight countries.

The REIT, which also has Mapletree Investments Pte Ltd as a sponsor, had assets under management of S$13.4 billion as of 30 June 2024.

Mapletree Logistics Trust reported a downbeat set of earnings for 1Q FY2025 due to a confluence of negative factors.

Gross revenue and NPI fell by 0.3% and 0.9% year on year, respectively, to S$181.7 million and S$156.7 million.

Portfolio occupancy stood high at 95.7% but dipped slightly from the previous quarter’s 96%.

The portfolio enjoyed a positive rental reversion of 2.6% for the quarter.

Investors should note that Mapletree Logistics Trust's manager is active in capital recycling to rejuvenate the REIT’s portfolio.

Three acquisitions were completed in 1Q FY2025 in Malaysia and Vietnam to capture growth from consumption hubs in these countries.

In the same quarter, the manager announced or completed four property divestments, all at premiums to their valuations. These properties have older specifications with limited redevelopment potential.

Mapletree Logistics Trust also has two long-term redevelopment projects (see above).

The first involved two properties in Malaysia with the potential for redevelopment through the amalgamation of two land parcels.

Mapletree Logistics Trust is seeking approval for this project and if approved, it is expected to be completed by 1H 2028.

The second is a redevelopment project at 51 Benoi Road that will increase gross floor area by 2.3 times to 887,000 square feet. This project should complete by 1H 2025.

Mapletree Logistics Trust also had an aggregate leverage of 39.6% with 83% of its loans hedged to fixed rates.

The REIT’s DPU tumbled by nearly 9% year on year to S$0.02068.

Based on MLT’s trailing 12-month DPU of S$0.088, its units provide a trailing distribution yield of 6.2%.

Find out how much dividends you would have received as a shareholder of Mapletree Logistics Trust in the past 12 months with the calculator below.  

Learn more about Mapletree Logistics Trust dividend history and dividend payment dates 

#3 – CapitaLand Ascott Trust (SGX: HMN.SI)

CapitaLand Ascott Trust, or CLAS, is a hospitality trust that owns 102 properties in 45 cities across 16 countries.

CapitaLand Ascott Trust has an AUM of S$8.5 billion as of 30 June 2024 and is supported by a strong sponsor in CapitaLand Investment Limited (CLI).

CLI is a global real estate manager with S$134 billion of AUM and S$100 billion of funds under management as of 31 Marh 2024.

CapitaLand Ascott Trust reported a mixed set of earnings for the first half of 2024 (1H 2024).

Although revenue climbed 11% year on year to S$386.4 million, distribution per stapled security (DPSS) fell by 8% year on year to S$0.0255.

The hospitality trust reported steady growth in revenue per available unit (RevPAU) for the second quarter of 2024 (2Q 2024).

2Q 2024’s RevPAU rose 4% year on year to S$155, led by an increase in room rates and stable occupancy of 75%.

The manager is undertaking selective turnkey acquisitions and development projects to enhance CLAS’s portfolio.

Back in January this year, the trust completed the turnkey acquisition of a 258-unit rental housing property in Fukuoka, Japan.

Over in Singapore, a development project for a 192-unit serviced residence at Somerset Liang Court is under construction and should complete by 2026.

The diagram above shows how CapitaLand Ascott Trust intends to build a stronger portfolio.

It will undertake divestments to unlock value while recycling the capital into higher-yield properties.

Meanwhile, the trust will carry out asset enhancement works to improve overall returns for its assets.

CapitaLand Ascott Trust's trailing 12-month DPSS stood at S$0.0634, giving its units a trailing distribution yield of 6.6%.

Find out how much dividends you would have received as a shareholder of CapitaLand Ascott Trust in the past 12 months with the calculator below.  

Learn more about CapitaLand Ascott Trust dividend history and dividend payment dates 

What would Beansprout do?

The three REITs above offer an attractive distribution yield and are also supported by financially-strong and reputable sponsors.

However, their dividends have been negatively impacted due to the impact of higher interest rates. 

With rates expected to fall, these REITs may see pressure easing up on their finance costs in 2025. 

The REITs have also been active in capital recycling and asset enhancements to improve on their distributions. 

Across the 3 REITs, CapitaLand Ascott Trust offers the highest dividend yield of 6.6%, compared to Mapletree Logistics Trust's dividend yield of 6.1% and Mapletree Pan Asia Commercial Trust's dividend yield of 6.1%. 

All 3 REITs have exposure to China, and may benefit from the recent stimulus measures announced by the government. In particular, CapitaLand Ascott Trust's hospitality assets may enjoy higher room rates from the recovery in Chinese tourists, while Mapletree Pan Asia Commercial Trust's Festival Walk asset in Hong Kong may benefit from higher shopper traffic. 

However, only Mapletree Pan Asia Commercial Trust is trading at a price-to-book valuation below its historical average. Both CapitaLand Ascott Trust and Mapletree Logistics Trust are trading close to their historical average price-to-book valuation. 

As such, it might be worth adding Mapletree Pan Asia Commercial Trust to your watchlist if you are looking for a REIT that offers a dividend yield of above 6%. 

Related Links:

• Mapletree Pan Asia Commercial Trust dividend history and dividend payment dates 

• Mapletree Logistics Trust dividend history and dividend payment dates 
• CapitaLand Ascott Trust dividend history and dividend payment dates 

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