4 Singapore REITs with Yields Over 8%: Are They a Buy?

The Smart Investor2022-08-18

We look at several high-yielding REITs to determine if they are good buys.REITs are great investment vehicles for delivering a stream of passive income.The requirement to pay out at least 90% of their...

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Comments

n86887
2022-09-29
n86887
Cool
AhChoo
2022-08-18
AhChoo
👌🏻👌🏻
liverpool777
2022-08-18
liverpool777
Good sharing
KeeBoonTong
2022-08-18
KeeBoonTong
Lalalala
adonis123
2022-08-18
adonis123
DYODD
TK360
2022-08-18
TK360
Nice

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However, excluding top-ups and stipulated damages in 1H2021’s DPU, then DPU would have risen by 13.4% year on year.Together with 2H2021’s DPU of S$0.0305, trailing 12-month DPU stands at S$0.0593, giving the REIT’s units a trailing distribution yield of 9.6%.UHREIT remains resilient to downturns as two-thirds of its base rental income comes from tenants providing essential services.The REIT had just concluded its third DPU-accretive acquisition of Upland Square last month and enjoys high occupancy of 96.2% as of 30 June 2022.Elite Commercial REIT (SGX: MXNU)Elite Commercial REIT owns a portfolio of 155 predominantly freehold commercial buildings across the UK valued at £517.7 million as of 30 June 2022.1H2022 saw revenue rise by 17.7% year on year to £18.7 million with distributable income improving by 9.7% year on year to £12.2 million.DPU, however, dipped by 2.7% year on year to £0.0256.Elite’s trailing 12-month DPU stood at £0.0536, giving its units a trailing distribution yield of 8.9%.The majority of the commercial REIT’s properties have inflation-linked escalation clauses built into their tenancy agreements, and will provide potential rental income uplift when rental rates adjust in 2023.Meanwhile, 63% of the REIT’s borrowings are on fixed rates, thus mitigating against a sharp rise in borrowing costs.Gearing ratio stood at 41.9% for Elite with a low cost of debt of just 2.3%.Manulife US REIT (SGX: BTOU)Manulife US REIT, or MUST, invests in a portfolio of US office assets.Its portfolio consists of 12 freehold office properties in US states such as Arizona, California, Oregon, and Virginia, and is valued at US$2.2 billion as of 31 December 2021.1H2022 saw MUST’s gross revenue rise 10.6% year on year to US$100.4 million.NPI inched up 2.8% year on year to US$57.6 million but DPU, on the other hand, fell by 3.3% year on year to US$0.0261.2H2021’s DPU came in at US$0.0263, so totalling the two halves gives MUST a trailing 12-month DPU of US$0.0524.The commercial REIT’s units offer a trailing distribution yield of 9.5%.MUST’s portfolio occupancy stood at a healthy 90% as of 30 June 2022.However, a point of concern is the low physical occupancy which came in at just 28% as most people are still working from home.Gearing stood fairly high at 42.4% with a weighted average cost of borrowing of 2.97%.85.7% of the REIT’s loans are on fixed rates, and every 1% increase in interest rates will reduce DPU by S$0.00079.Cromwell European REIT (SGX: CWBU)Cromwell European REIT, or CEREIT, has a portfolio of more than 110 predominantly freehold properties located in cities across the Netherlands, Italy, France, and Finland, to name a few.These properties were valued at €2.6 billion as of 30 June 2022 with net lettable area of two million square metres.CEREIT put up a respectable performance for 1H2022, with gross revenue rising 8.5% year on year to €107.4 million and NPI climbing 4.7% year on year to €67.3 million.DPU inched up 2.3% year on year to €0.08695.Coupled with 2H2021’s DPU of €0.08459, trailing 12-month DPU came in at €0.17154.CEREIT’s units offer a trailing distribution yield of 8.1%.The REIT reported record-high occupancy of 95.4% and enjoyed positive rent reversion of 2.9% across the portfolio for 1H2022.Aggregate leverage stood at 38.6% as of 30 June 2022, with a low all-in interest rate of 1.72%.CEREIT is aiming to refinance around €180 million of debt due this year and the next by 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