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Five Singapore REITs, including Manulife US REIT and Frasers Centrepoint Trust, have announced or completed yield accretive property acquisitions.
With their combined net asset value continuing to expand, Singapore real estate investment trusts (REITs) posted a total return of 13.6 percent on average and an average dividend yield of 6.5 percent, revealed the latest update from SGX.
This comes as the sector witnessed several strategic acquisitions.
“Singapore’s REITs are characterised by comparatively high and stable distribution yields, in addition to the potential for portfolio growth. While REIT managers are known to be cautious with balance sheets, acquisitions and secondary fundraisings continue to advance in 2019,” noted SGX.
In May, five REITs either announced or completed property acquisitions that are all yield accretive, hence, expected to boost their respective portfolios’ overall distribution yield.
Frasers Centrepoint Trust (FCT) revealed plans to acquire one-third interest in Waterway Point for $433.3 million. Post-acquisition, FCT expects its distributable income to increase 12 percent and its distribution per unit to grow 0.29 percent.
AIMS APAC REIT (AA REIT) unveiled plans to expand its footprint in Australia and entered into a sales and purchase contract with GSM Rocket Australia to purchase Boardriders APAC HQ for A$38.46 million. Following the acquisition, AA REIT expects its DPU and DPU yield to increase 0.8 percent.
EC World REIT also announced “the proposed acquisition and master lease agreements of Fuzhou e-commerce with land area of 88,000 sq m”. The REIT expects its net property income to expand 16.4 percent and its DPU to increase 1.6 percent to 6.278 Singapore cents, post-acquisition.
Meanwhile, Sasseur REIT completed “its first acquisition since its March 2018 IPO”. Sasseur REIT purchased additional shop units with existing tenancies at Sasseur (Hefei) Outlets’ annex block “from third-party vendors for a purchase consideration of RMB98.3 million, representing a discount of approximately 4.1 percent compared to valuation”.
Its manager expects the acquisition to boost the REIT’s “DPU and NAV per unit from 5.128 cents and 90.33 cents to 5.179 cents and 90.37 cents respectively, being DPU and NAV accretive on a pro forma basis”.
Manulife US REIT also completed its acquisition of a property in Fairfax, Virginia, Washington, D.C. Its manager expects the REIT’s distributable income to climb 12.6 percent and its DPU to increase 3.3 percent to 5.76 US cents with adjusted DPU expected to grow 2.6 percent, post-acquisition.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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