3 Singapore REITs Reporting Positive Double-Digit Rent Reversions: Can They Grow Their DPU?

The Smart Investor10 minutes ago

REIT investors are breathing a sigh of relief as interest rates and inflation start to ease.The US Federal Reserve made its first rate cut of 0.5 percentage points in September as part of the start of...

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class=\"meta\">\n\n\n2024-10-30 10:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/3-singapore-reits-reporting-positive-double-digit-rent-reversions-can-they-grow-their-dpu/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>REIT investors are breathing a sigh of relief as interest rates and inflation start to ease.The US Federal Reserve made its first rate cut of 0.5 percentage points in September as part of the start of...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/3-singapore-reits-reporting-positive-double-digit-rent-reversions-can-they-grow-their-dpu/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999008742.SGD","symbol_name":"Eastspring Investments Unit Trusts - Singapore ASEAN Equity 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lease is renewed, thereby acting as a proxy for the property’s demand.Positive rent reversions are a sign of strong demand as tenants are willing to pay higher prices to lease the property.Here are three Singapore REITs that announced double-digit positive rental reversions that you can add to your REIT watchlist.OUE REIT (SGX: TS0U)OUE REIT is a diversified REIT with a portfolio of six assets in Singapore and one in Shanghai with total assets under management (AUM) of S$6.3 billion as of 31 December 2023.These assets include two hotels in Singapore with 1,655 upscale hotel rooms along with approximately 2.2 million square feet of prime office and retail space.The REIT reported a stable set of numbers during its business update for its third quarter of 2024 (3Q 2024) ending 30 September 2024.Revenue dipped slightly by 1.3% year on year to S$74.8 million with a slightly lower contribution from the REIT’s hospitality segment.Net property income (NPI) dipped by 3.7% year on year to S$60.3 million primarily because of an upward tax revision for property tax for both Hilton Singapore Orchard and Crowne Plaza Changi Airport.If the tax revision was excluded, NPI would have declined by just 1.2% year on year.Meanwhile, OUE REIT’s Singapore office portfolio demonstrated healthy operating statistics with a committed occupancy of 95.8%.Rental reversion for the division came in at 10.8% for 3Q 2024.At Mandarin Gallery, committed occupancy also stood high at 95.3% with a positive rental reversion of 16% for the quarter.OUE REIT’s hospitality segment, however, saw lower NPI as a result of the normalisation of tourist spending.Revenue and NPI for the division fell by 1.7% and 8.9% year on year, respectively, for 3Q 2024.Management intends to leverage on the successful asset enhancement initiatives (AEIs) for both hotels to attract more visitors.For the commercial division, the REIT’s main objective is to focus on tenant retention and optimise occupancy.In the long term, management’s goal is to increase revenue contribution from the hospitality segment to 40% (currently: 35%).CapitaLand Ascendas REIT (SGX: A17U)CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT with a portfolio of 226 properties across Singapore, the US, Australia, and the UK/Europe.The REIT’s AUM stood at S$16.8 billion as of 30 September 2024.Like OUE REIT, CLAR also recently released its 3Q 2024 business update.Portfolio occupancy stood healthy at 92.1% while the REIT reported a positive rental reversion of 14.4% for the quarter.The rental reversion was an improvement from 2Q 2024’s reversion of 11.7% and was also higher than the prior year’s 10.2%.CLAR completed two AEIs for Singapore industrial properties to the tune of S$3.9 million during 3Q 2024.Post 3Q 2024, the REIT announced the divestment of 21 Jalan Buroh for S$112.8 million.Elsewhere, CLAR has six ongoing AEIs cum redevelopment projects worth S$572.6 million to help refurbish or spruce up its portfolio.With an aggregate leverage of 38.9%, the REIT still has sufficient debt headroom to use debt for its acquisitions.Keppel REIT (SGX: K71U)Keppel REIT is an office REIT with a portfolio of 13 properties spread out across Singapore (4), Japan (1), South Korea (1), and Australia (7).The REIT’s property value is worth S$9.5 billion as of 30 September 2024.The REIT reported a mixed set of results for the first nine months of 2024 (9M 2024).Property income increased by 12.3% year on year to S$193.7 million while NPI attributable to unitholders improved by 11.6% year on year to S$134.4 million.However, a 33% year-on-year spike in borrowing costs led to distributable income dipped by 1.9% year on year to S$160.6 million for 9M 2024.Despite this decline, Keppel REIT maintained a high portfolio occupancy of 97.6% as of 30 September 2024.The REIT’s properties recorded an overall positive rental reversion of 10.2%.Keppel REIT’s gearing stood at 41.9% with an average cost of debt of 3.38%.The REIT enjoys an interest coverage ratio of three times and has refinanced the bulk of its debt for 2024.One Raffles Quay saw its AEI commence in 1Q 2024 and progress is on track.The property saw its main lobby concierge counters and signages refreshed and management intends to expand the property’s food and beverage offerings to provide more options for tenants.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; 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