MLT, PLife & FHT bucked trend to raise DPUs
A majority of Singapore Reits that declared dividend distributions for the financial period ended 30 September 2023 reported a lower distribution per unit (DPU) on year. According to investment advisory platform Beansprout, lower distributions have partly led to weakness in the share price of S-Reits.
Reits have been facing twin headwinds of high inflation along with surging interest rates.
As 10-year US Government Bond yields declined from the highs seen in mid-October, the iEdge S-Reit Index has gained 9.4% total returns, narrowing the year-to-date decline of the index from 9.0% as at Oct 31, 2023 to 0.4% as at Nov 23, 2023.
REIT Watch - Three S-Reits with higher DPUs year on year declared for financial period ended Sep 30, 2023
Despite industry headwinds, three S-Reits have bucked the trend and reported higher year-on-year DPU.
1.$Mapletree Log Tr(M44U.SI)$
Mapletree Logistics Trust (MLT) reported that its H1FY2024 gross revenue and net property income (NPI) dipped by 0.7% and 1% respectively to S$368.9 million and S$320.1 million.
Despite the decline, DPU for the period grew 0.5% year on year (yoy) to 4.539 cents.
MLT maintained an occupancy rate of 96.9% but saw its average rental reversion dip to 0.2% from 4.2% in the previous quarter. This was largely due its Chinese properties within its portfolio.
However, MLT’s Reit manager continues to be active in capital recycling, with a total of five divestments announced in the second quarter in Malaysia, Singapore and Japan.
MLT also announced two more divestments in early November 2023, a property in Tuas Avenue 3 for S$11.1 million and two properties in Malaysia for RM151.2 million.
2. $ParkwayLife Reit(C2PU.SI)$
ParkwayLife Reit (PLife) reported that its 9M2023 gross revenue increased 24.6% yoy to S$110.9 million, boosted by higher rent from a new master lease agreement for its three Singapore hospitals, alongside contributions from the acquisition of five nursing homes in Japan.
PLife’s NPI improved by 26.2% yoy to S$104.5 million, and DPU grew 2.8% yoy to 10.99 cents. PLife recently completed the acquisition of two nursing homes in Japan in October 2023 for around S$16.4 million, which the Reit manager believes will be DPU-accretive.
PLife also intends to build up a third key market as part of its multi-pronged growth platform to grow its asset base and DPU.
Since its initial public offering in 2007, PLife has recorded un-interrupted recurring DPU growth.
3. $Frasers HTrust(ACV.SI)$
Frasers Hospitality Trust (FHT) reported that its FY2023 gross revenue increased 28.5% yoy to S$123.2 million and NPI grew 30.1% yoy to S$90.5 million, on the back of sustained recovery in global tourism and improved operating environment.
Distribution per stapled security (DPS) surged 49.3% yoy to 2.4426 cents.
FHT’s overall portfolio value grew 1.7% yoy to S$1.93 billion as of Sep 30, 2023. Revenue per available room (RevPAR) growth was also achieved across all country portfolios in FY2023.
RevPAR of all country portfolios have surpassed pre-Covid levels since 9MFY2023, except Japan. FHT’s manager intends to unlock value for unitholders via divestments while scouting for yield-accretive acquisitions to enhance overall returns.
https://www.sgx.com/research-education/market-updates/20231127-reit-watch-three-s-reits-which-bucked-trend-raise-dpus
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