2 Resilient Singapore REITs For Income and Growth In a Low Interest World

🌟🌟🌟With Singapore's SORA and fixed deposit rates continuing to slide, income focused investors are searching for better returns without ramping up risks.  One sector quietly shining is Singapore's Real Estate Investment Trusts (SReits).  SReits offer a compelling mix of stability, yield and long term potential.  Whether you are after dependable dividends or exposure to rising real estate sectors like retail and healthcare, these 2 REITs stand out as smart alternatives to traditional savings.

1.  Capitaland Integrated Commercial Trust 

$CapLand IntCom T(C38U.SI)$  is Singapore's largest and most established REIT and plays a central role in Singapore's commercial real estate landscape.

CICT was formed through the merger of Capitaland Mall Trust and Capitaland Commercial Trust in 2020, creating a diversified REIT with exposure to both retail and office assets. 

Portfolio Highlights

CICT owns retail icons such as Raffles City, Plaza Singapura and Bugis Junction.  It also owns CapitaGreen, Asia Square Tower 2 Office buildings.  Its recent acquisition of 50% stake in ION Orchard boosted its Orchard Road presence.

Why it stands out

CICT's strength is diversification across retail and office sectors, with occupancy rates above 95%.  Its prime locations and strong tenant base offer resilience in economic cycles. 

Distribution Yield - 5% paid semi annually 

Performance - CICT is up 2.8% in the past 5 days and 11.2% year todate. 

Target price is an average of SGD 2.30, an upside potential of 6%.

2.  Parkway Life Reit 

Parkway Life Reit $ParkwayLife Reit(C2PU.SI)$  is one of Asia's most defensive and consistently high performing healthcare Reits and it has earned that reputation for good reason. 

What makes Parkway Life Reit Unique? 

Parkway Life Reit invests exclusively in healthcare related properties.  These include Singapore' s Top private hospitals - Mount Elizabeth, Gleneagles and Parkway East.  It also owns 60 high quality nursing homes and care facility properties in Japan located across various prefectures in Japan.  In addition to that Parkway Life Reit owns 11 strategically located nursing homes in France. 

This sector focus gives it a recession resistant edge as healthcare demand remains stable regardless of economic cycles. 

2.  Long Term Inflation Protected Leases 

PLife Reit's Singapore hospital leases are locked in until 2042 with built in inflation linked rent increase.  This provides for predictable growing income, protection against rising costs and minimal tenant turnover risk. 

3.  Rock Solid Financials 

Market capitalisation is SGD 2.64 billion.  P/E ratio is 25.3.  Dividend yield is 3.6% paid out semi annually. 

4.  Global Diversification with Local Strength 

While its flagship assets are in Singapore, PLife Reit has expanded into Japan and France, tapping into aging populations and rising demand for eldercare.  This geographical spread reduces reliance on any single market. 

Why It Stands Out 

Defensive Sector - Healthcare is essential, making PLife Reit less sensitive to economic downturns.

Stable Income - Long leases and inflation linked rents provide reliable, growing cash flow. 

Strong Track Record - Over 15 years of uninterrupted Distributions growth. 

Low Beta - Its low beta makes it a safe haven during market turbulence. 

Performance 

Even though PLife is down 0.7% in the past 5 days, it is up 6.6% year todate.  In 2024, PLife has risen 10%.

Target price is SGD 4.61 according to consensus estimate, an upside potential of 14.9%.

Final Takeaway - Resilient Strength versus Defensive Stability 

CICT and PLife Reit represent 2 Pillars of strength within the Singapore Reit universe.  Each excels in its own area of expertise. 

CICT offers scale, diversity and prime commercial exposure across retail and office sectors, making it an ideal pick for investors seeking urban growth with income consistency. 

Meanwhile PLife stands out for its defensive healthcare focus, long term inflation linked leases and low volatility.  This is perfect for investors seeking steady, recession resistant income with global healthcare upside. 

Together they embody a powerful core satellite strategy - CICT fuels long term capital growth while PLife cushions the portfolio with dependable yield.  In a world chasing yield with caution, this duo delivers strength, safety and staying power.  A rock solid combination for any Reit saavy investor.   This is why I have been holding them long term in my portfolio. 

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