4 Singapore REITs to Watch Out for in June

Yahoo

2 days ago

The REIT sector continues to be a reliable source of dividends for income investors who are seeking to navigate a complex macroeconomic landscape.
Although the asset class was beset by the twin challenges of inflation and elevated interest rates, things are looking up.
Interest rates have moderated, and inflation has declined significantly from its high in 2022.
Meanwhile, REIT managers have been active in reconstituting their portfolios and are engaging in capital recycling activities to improve their portfolios.
Here are four Singapore REITs you should keep an eye out for in June.
CapitaLand Ascendas REIT, or CLAR, is Singapore's oldest industrial REIT and also one of the largest industrial REITs listed on the Singapore Exchange (SGX: S68).
The REIT released an encouraging business update for the first quarter of 2025 (1Q 2025).
Portfolio occupancy stood at 91.5%, and the portfolio also enjoyed a positive rental reversion of 11%.
During the quarter, CLAR completed the sale and leaseback acquisition of a Class A modern logistics property for S$153.4 million.
A redevelopment at Science Park Drive was also completed for S$300 million.
The REIT also saw two asset enhancement initiatives (AEIs) completed, one in the US and the other in Singapore.
Just last week, CLAR announced the acquisition of two properties in Singapore – a data centre at 9 Tai Seng Drive, and a business space property at 5 Science Park Drive.
Both properties are fully occupied, with the data centre sporting a net property income (NPI) yield of 7.2% and the business space property having a 6.1% NPI yield.
These acquisitions will help to solidify the REIT's Singapore footprint and enhance the quality of CLAR's portfolio.
The purchases should also translate into a 1.36% accretion to distribution per unit (DPU) for the REIT.
Moreover, there is the potential for rental uplift as 9 Tai Seng Drive has room for capacity expansion.
For 5 Science Park Drive, the existing rent is around 15% below market rates, allowing for future positive rental reversion.
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 141 properties spanning 25.2 million square feet of net lettable area.
MIT's portfolio was valued at S$9.1 billion as of 31 March 2025.
In the middle of May, the REIT entered into a sale and purchase agreement to sell three industrial properties in Singapore for S$535.3 million to Brookfield Asset Management (NYSE: BAM).
These three properties, named The Strategy, The Synergy, and the Woodlands Central Cluster, were at a 2.6% premium to the properties' independent valuations of S$521.5 million.
It was also a 22.1% increase from these properties' original cost of S$438.4 million.
The Strategy and The Synergy had occupancy rates of 82.1% and 71.6%, respectively, while Woodlands Central boasted a higher occupancy rate of 95.5%.
These divestments should be completed by 3Q 2025.
MIT's rationale for the sale was to strengthen its capital structure and improve its financial flexibility for future investments while realising the capital appreciation on these properties.
Manulife US REIT, or MUST, is an office REIT with a portfolio of eight freehold properties in the US with a total NLA of 4.1 million square feet.
The office REIT agreed to sell its Peachtree Class A office building in Georgia for a gross consideration of around US$133.8 million.
MUST will receive around US$118.8 million in net proceeds, which will be used to make an early repayment of its 2026 loans.
With this repayment, around 78% of its total debt due in 2026 will be repaid.
This sale also allows MUST to achieve 82% of its net sales proceeds target under the Master Restructuring Agreement (MRA), enabling the beleaguered office REIT to negotiate a recovery path with its lenders.
The REIT had already divested Capitol in California and Plaza in New Jersey as part of its progress in repaying its loans.
With this divestment, MUST's pro-forma aggregate leverage should improve from 60.8% to 57.7%, with its pro-forma weighted average cost of debt reduced from 4.53% to 4.07%.
This disposal means that the REIT's portfolio will now comprise seven properties with an NLA of around 3.5 million square feet.
Elite UK REIT owns mostly freehold properties in the UK and is the largest provider of infrastructure to the Department for Work and Pensions (DWP) and other UK government departments.
As of 31 December 2024, the REIT had an AUM of more than S$2 billion.
Elite UK REIT reported an encouraging set of earnings for 1Q 2025 as revenue inched up 0.6% year on year to £9.3 million.
NPI shot up 24.4% year on year to £10.4 million because of a one-off lease surrender premium and dilapidation settlement.
Excluding this, NPI would have increased by 4.9% year on year to £8.7 million.
DPU increased by 9.6% year on year to £0.0076.
With its expanded investment mandate, the manager plans to reposition two of its properties.
The first is Lindsay House in Dundee, a vacant asset that can be repositioned into a purpose built-student accommodation (PBSA).
The conversion will use the property's existing structure, which will reduce project costs and accelerate the asset's time-to-market.
The expected opening of this PBSA is September 2027.
The other asset is a site in Blackpool, which can be developed into a potential data asset development.
Elite UK REIT has submitted the planning permission for this site, which is now in its final stages.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust and Singapore Exchange.
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