The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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Cache Logistics Trust’s Latest Result: Higher Revenue but Lower Distribution Per Unit
- Original Post from The Motley Fool Sg

Last Friday, Cache Logistics Trust (SGX: K2LU) released its 2018 fourth-quarter earnings update. Cache Logistics Trust is a real estate investment trust (REIT) that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio that are located in Singapore, Australia, and China.


Here are 10 things investors should know about Cache Logistics Trust’s latest results:



  1. Gross revenue for the reporting quarter grew 4.8% to S$31.0 million, while net property income fell by 0.6% to S$23.4 million.

  2. The REIT’s distribution per unit (DPU) was down by 5.9% year over year to 1.502 cents, mainly due to lower income for distribution and ahigher number of units in issue.

  3. Based on Cache Logistics Trust’s full-year DPU of 5.903 Singapore cents and its unit price of S$0.74 (as of writing), the REIT has a trailing distribution yield of 8.0%.

  4. As of 31 December 2018, the REIT’s gearing stood at 36.2%, which is a good distance from the regulatory ceiling of 45%.

  5. The REIT’s portfolio had a committed occupancy rate of 95% at the end of the quarter.

  6. The weighted average lease expiry (by gross rental income) was at 3.1 years as of 31 December 2018. Overall, 76.5% of Cache Logistics Trust’s leases will expire within the next five years, while the rest will expire after 2024.

  7. For this quarter, Singapore accounted for 76% of Cache Logistics Trust’s gross revenue. Australia was in second place with 23%, and China accounted for the remaining 1%.

  8. There are a total of 14 properties on which Cache Logistics Trust has the right of first refusal (ROFR) to acquire. These properties belong to the REIT’s sponsor, CWT Limited, which was acquired by the Hong Kong-listed CWT International Limited (previously HNA Holding Group) in late 2017.

  9. Cache Logistics Trust divested Jinshan Chemical Warehouse in Shanghai for RMB87.0 million.

  10. Cache Logistics Trust provided the following outlook guidance:


“The global economy remains uncertain as rising trade tensions and geopolitics continue to weigh in. Singapore’s economy grew slower at 2.2% on a year-on-year basis in 4Q2018 due to a softening manufacturing sector. JTC’s rental indices showed a continuing rental decline for single-user factory and warehouse space, although the rate of decrease has moderated. Industrial factory and warehouse rents are forecasted to change -0.5% to +0.5% in 2019. In Australia, the economy is performing well, although GDP growth is forecasted to average around 3.5% in 2018 and 2019 before slowing in 2020 due to a forecasted slower growth in resource exports.


Looking ahead, the Manager will continue to pursue opportunities for strategic acquisitions and asset enhancements to strengthen its portfolio and grow earnings over time.”


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned.



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Cache Logistics Trust’s Latest Result: Higher Revenue but Lower Distribution Per Unit
- Original Post from The Motley Fool Sg

Last Friday, Cache Logistics Trust (SGX: K2LU) released its 2018 fourth-quarter earnings update. Cache Logistics Trust is a real estate investment trust (REIT) that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio that are located in Singapore, Australia, and China.


Here are 10 things investors should know about Cache Logistics Trust’s latest results:



  1. Gross revenue for the reporting quarter grew 4.8% to S$31.0 million, while net property income fell by 0.6% to S$23.4 million.

  2. The REIT’s distribution per unit (DPU) was down by 5.9% year over year to 1.502 cents, mainly due to lower income for distribution and ahigher number of units in issue.

  3. Based on Cache Logistics Trust’s full-year DPU of 5.903 Singapore cents and its unit price of S$0.74 (as of writing), the REIT has a trailing distribution yield of 8.0%.

  4. As of 31 December 2018, the REIT’s gearing stood at 36.2%, which is a good distance from the regulatory ceiling of 45%.

  5. The REIT’s portfolio had a committed occupancy rate of 95% at the end of the quarter.

  6. The weighted average lease expiry (by gross rental income) was at 3.1 years as of 31 December 2018. Overall, 76.5% of Cache Logistics Trust’s leases will expire within the next five years, while the rest will expire after 2024.

  7. For this quarter, Singapore accounted for 76% of Cache Logistics Trust’s gross revenue. Australia was in second place with 23%, and China accounted for the remaining 1%.

  8. There are a total of 14 properties on which Cache Logistics Trust has the right of first refusal (ROFR) to acquire. These properties belong to the REIT’s sponsor, CWT Limited, which was acquired by the Hong Kong-listed CWT International Limited (previously HNA Holding Group) in late 2017.

  9. Cache Logistics Trust divested Jinshan Chemical Warehouse in Shanghai for RMB87.0 million.

  10. Cache Logistics Trust provided the following outlook guidance:


“The global economy remains uncertain as rising trade tensions and geopolitics continue to weigh in. Singapore’s economy grew slower at 2.2% on a year-on-year basis in 4Q2018 due to a softening manufacturing sector. JTC’s rental indices showed a continuing rental decline for single-user factory and warehouse space, although the rate of decrease has moderated. Industrial factory and warehouse rents are forecasted to change -0.5% to +0.5% in 2019. In Australia, the economy is performing well, although GDP growth is forecasted to average around 3.5% in 2018 and 2019 before slowing in 2020 due to a forecasted slower growth in resource exports.


Looking ahead, the Manager will continue to pursue opportunities for strategic acquisitions and asset enhancements to strengthen its portfolio and grow earnings over time.”


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.



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First Real Estate Investment Trust: 3 Reasons For Singapore Investors To Like It Now
- Original Post from The Motley Fool Sg

First Real Estate Investment Trust (SGX: AW9U) has a portfolio of 20 properties (16 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities. The REIT’s sponsors are PT Lippo Karawaci Tbk and OUE Lippo Healthcare Limited.


First REIT’s stocks are currently out of favor among investors. At its current price of S$1.00 (at the time of writing), First REIT’s shares are down by 30% from its high in the last 12 months.


Yet, despite the decline in share price, there are many reasons why the REIT might be a good investment for investors. We discussed the first two reasons in an article here. As a quick recap, those reasons were:



  1. Strong financial track record

  2. Positive result for 2018


In this article, we will continue with the final reason.


Valuation


No investment analysis is ever complete unless we consider the valuation of the REIT. Here, even REIT with solid track record and good prospects might turn out to be a “bad” investment if investors overpay for it.


The good news is that First REIT seems to be trading at an attractive valuation now. This is especially true given the decline in its share price for the past year. Let’s consider the following:



Source: Stock Facts on SGX.com


The table above shows First REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 41 REITs that are in Singapore’s stock market.


What we can see from the above is that the First REIT stock price trades at a significant discount to the market average’s distribution yield. On the other hand, its price to book ratio is comparable to the market average.


Clearly, the market is not overly optimistic about the First REIT now, rendering it a low valuation as compared to its peers.


Conclusion:


In summary, the market is rather pessimistic with First REIT for now. Yet, long term investors might find the REIT a good investment idea now due to its strong financial track record, a positive result for 2018 and low valuation.


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. Motley Fool has a recommendation for First Real Estate Investment Trust.



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Two Reasons For Singapore Investors To Like First Real Estate Investment Trust Now
- Original Post from The Motley Fool Sg

First Real Estate Investment Trust (SGX: AW9U) has a portfolio of 20 properties (16 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities. The REIT’s sponsors are PT Lippo Karawaci Tbk and OUE Lippo Healthcare Limited.


First REIT’s stock is currently out of favor among investors. At its current price of S$1.00 (at the time of writing), First REIT’s shares are down by 30% from its high in the last 12 months.


Yet, despite the decline in share price, there are many reasons why the REIT might be a good investment for investors. Here are two reasons to like First REIT now.


Strong financial track record


Investors make money from REIT investments in two ways – increase in share price and sustainable distribution per unit (DPU) payout. Both factors, in turn, are driven by how well a REIT can sustain the income of its existing assets, as well as grow its assets, over the long term.


Here, First REIT has shown that it has the capability to grow its asset base over the long term. See chart below:



Source: First REIT’s earnings presentation


As a result of the growth in asset under management, First REIT’s distributable income has grown over the years. See the next chart below:



Source: First REIT’s earnings presentation


From the above, we can see that First REIT has delivered steady growth over the years, both in term of asset under management and distributable income.


Positive result for 2018


Not only did First REIT do well in growing its assets and income over the years, it continued to perform well in the latest financial year ended 31 December 2018.


Here are some numbers: Gross revenue increased 4.7% while its net property income (NPI) improved 4.5%, respectively, as compared to the same period last year. The improvement was primarily due to contributions from the newly-acquired Siloam Hospitals Buton & Lippo Plaza Buton and Siloam Hospitals Yogyakarta, as well as increased rental income from existing properties. Distributable income was 1.5% higher as compared to last year. Consequently, distribution per unit (DPU) came in higher by 0.4% year-on-year to 8.60 cents.


In other words, First REIT managed to sustain its good performance for another year.


Conclusion:


In summary, the market is rather pessimistic with First REIT. Yet, long term investors might find the REIT a good investment idea now due to the reasons mentioned above.


Lastly, if you enjoy the above arguments, look out for the final reason to like First REIT, over the next few days.


Stop worrying about the uncertain REITs market with our new Complete Guide To Buying The Best Singapore REITs. We give you 3 quick ways to easily value your REITs so you save tons of research time. Value your REITs today so you know exactly when to buy, sell or hold. Simply enter your email here and we will rush the 42-page PDF immediately to your inbox...for FREE!


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. Motley Fool has a recommendation for First Real Estate Investment Trust.



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2 REITS That Have Delivered Growth Recently
- Original Post from The Motley Fool Sg

It’s earnings season again.


Real estate investment trust (REITs) have always been one of the favourite investment choices for risk adverse investors due to its stable earnings qualities.


In this article, I will look at two REITs that have lived up to their investors’ expectation by delivering positive performances in their latest earnings updates.


The first REIT on the list is First Real Estate Investment Trust (SGX: AW9U), or First REIT.As a quick introduction, First REIT is a healthcare-focused real estate investment trust. It currently has a portfolio of 20 properties (16 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities.


For the fourth quarter ended 31 December 2018, First REIT’s gross revenue increased by 2.7% while its net property income (NPI) improved 1.9% as compared to the same period last year. The improvement was primarily due to contributions from the newly-acquired hospitals, as well as increased rental income from existing properties. Distribution per unit (DPU) came in flat at 2.15 cents.


As of 31 December 2018, First REIT’s gearing and committed occupancy rate stood at 35.0% and 100% respectively.


Victor Tan, chief executive of First REIT’s manager, said the following in the earnings release (OUE refers to OUE Ltd (SGX: LJ3) and OUELH refers toOUE Lippo Healthcare Ltd (SGX: 5WA) in the comments below)):


“We are pleased to close the year with stable and credible results underpinned by steady performance from our existing portfolio of 20 properties in Indonesia, Singapore and South Korea. With OUE and OUELH on board, First REIT and Bowsprit are well-positioned to tap on the growing opportunities in the Asia Pacific region to capitalise on the tremendous growth in demand for quality and affordable healthcare. In addition to the right-of-first-refusal to Lippo Karawaci’s pipeline of properties for acquisition in Indonesia, we now also have a first-right-of-refusal from OUELH. Our roadmap for the next three to five years is to look at asset rebalancing, diversifying our income streams by expanding into other geographical regions, as well as exploring opportunities to unlock the value of our existing assets.”


The next REIT on the list is Mapletree Logistics Trust (SGX: M44U).As a quick introduction, Mapletree Logistics Trust, or MLT, is a REIT that owns 140 logistics properties around Asia-Pacific region that includes Singapore, Hong Kong, Japan, China, South Korea and Australia.


In the latest quarter ended 31 December 2018, MLT reported that gross revenue grew 23.0% to S$120.8 million while NPI jumped 25.9% to S$104.5 million.


Also, DPU was up by 5.0% year-on-year to 2.002 cents, mainly due to the higher net property income.The growth in DPU was achieved despite an increase in units from 3.1 billion a year ago to 3.6 billion in the reporting quarter. The stronger performance was mainly driven by growth from the existing portfolio as well as contributions from new acquisitions.


Ng Kiat, chief executive of MLT’s manager, commented:


“Amidst the volatile economic environment, we remain vigilant and focused on working closely with our tenants to maintain a stable portfolio performance. During the quarter, we have strengthened MLT’s portfolio with the acquisitions of three quality logistics facilities in Australia, South Korea and Vietnam and the divestment of a warehouse with older specifications in Singapore. We will continue to keep the momentum on portfolio rejuvenation through quality acquisitions and selective divestments.”


As of 31 December 2018, the REIT’s gearing stood at 38.8% while its occupancy rate was 97.7%.


Stop worrying about the uncertain REITs market with our new Complete Guide To Buying The Best Singapore REITs. We give you 3 quick ways to easily value your REITs so you save tons of research time. Value your REITs today so you know exactly when to buy, sell or hold. Simply enter your email here and we will rush the 42-page PDF immediately to your inbox...for FREE!


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. Motley Fool has a recommendation for First Real Estate Investment Trust.


$IHC(5WA.SI) $First Reit(AW9U.SI) $OUE(LJ3.SI) $Mapletree Log Tr(M44U.SI)

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