2 Singapore REITS That Have Delivered Growth Recently

Its earnings season again, and many Singapore REITs are starting to report their most recent results.

REITs have always been a favourite investment choice for risk-adverse investors because of their stable earnings qualities. Let’s take a look at two REITs that have lived up to their investors’ expectations by delivering positive performances in their latest earnings updates.

ESR-REIT (SGX: J91U) is the first REITs that announced a stronger quarterly result recently. ESR REIT invests in income-producing industrial properties and has a diversified portfolio of 57 properties located across Singapore.

For the quarter ended 31 March 2019, gross revenue surged by 92.9% year on year to S$64.8 million, while net property income improved by 104.2% to S$48.6 million. Similarly, distribution per unit (DPU) grew by 18.9% to 1.007 Singapore cents. The growth in performance was driven mainly by the acquisition of 15 Greenwich Drive as well as the recent merger with Viva Industrial Trust.

Adrian Chui, Chief Executive Officer of ESR Fund Management, commented:

“Following the successful merger, our portfolio has been integrated smoothly. Our financial and real estate systems and processes have been integrated to achieve a better operating platform while we continue to improve our human resource capacities. At the same time, our post merger portfolio has also become more diversified and stable with reduced concentration risks and improved trading liquidity and coverage. In addition, our capital structure is more robust with longer debt tenors, higher proportion of fixed rate debt on a longer tenor and enjoys a wider banking support. During this quarter, we continued on our plans to carry out rejuvenations and AEIs for several identified assets to ensure our portfolio is ‘future-ready’ to meet the growing and changing demands of the “industrialists of tomorrow.”

As of 31 March 2019, the REIT’s gearing stood at 42.0%, and its committed occupancy rate stood at 92.0%.

The next REIT is Cache Logistics Trust (SGX: K2LU), a real estate investment trust that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio located in Singapore and Australia.

In the quarter ended 31 March 2019, gross revenue grew 6.2% to S$30.8 million, while net property income improved by 4.0% to S$23.8 million. The improvement was driven by higher contribution from existing properties and the latest acquisitions. The REIT’s distribution per unit (DPU) was up by 0.4% year on year to 1.513 Singapore cents.

Daniel Cerf, chief executive officer of the REIT manager, commented:

“We are pleased to report that we continue to make strides in our Portfolio Rebalancing and Growth Strategy through the strategic acquisition of the Altona property this quarter. We continue to execute the strategy to increase our exposure to freehold assets and to optimise and grow earnings in key core markets to deliver sustainable returns for our unitholders.”