3 REITS that have more than 8% return at this time

Real estate investment trusts, or REITs, are popular investment choices in the Singapore stock market. This is because REITs tend to have high distribution returns because of the need to distribute at least 90% of their taxable income to unitholders in order to benefit from tax transparency. In this article, I am going to share with you three REITs that are trading at high distribution yields, above 8%. Source: SGX StockFacts We will start with Cache Logistics Trust (SGX: K2LU). Cache Logistics Trust is a real estate investment trust that focuses on logistics properties. He currently has 27 logistics …

Real estate investment trusts, or REITs, are popular investment choices in the Singapore stock market. This is because REITs tend to have high distribution returns because of the need to distribute at least 90% of their taxable income to unitholders in order to benefit from tax transparency.

In this article, I am going to share with you three REITs that are trading at high distribution yields, above 8%.

Source: SGX StockFacts

We will start with Cache Logistics Trust (SGX: K2LU) Cache Logistics Trust is a real estate investment trust that focuses on logistics properties. Its portfolio currently has 27 logistics warehouses located in Singapore, Australia and China.

In the quarter ended September 30, 2018, Cache Logistics Trust reported that gross revenues increased 14.8% to S $ 31.5 million, while net real estate revenues increased by 8.1% to reach 23.1 million Singaporean dollars. The improvement results from the increased contribution of existing properties and recent acquisitions. However, the distribution per unit of the REIT decreased by 4.3% year-over-year to 1.475 cents, primarily due to lower distribution revenues and the issuance of new units.

At September 30, 2018, the REIT's exchange rate was 35.6% and its occupancy rate was 96.9%.

then, we have First Real Estate Investment Trust (SGX: AW9U). As a quick introduction, First REIT is a real estate investment firm specializing in healthcare, with a portfolio of 20 properties (16 in Indonesia, 3 in Singapore and one in South Korea). The sponsor of the REIT is the largest listed Indonesian real estate company, PT Lippo Karawaci Tbk.

For the quarter ended September 30, 2018, First REIT stated that the gross business figure increased by 5.1%, while that of NPI was up 5.4%, compared to the same period last year. the same period of the previous year. This improvement is mainly due to contributions from the recently acquired Siloam Hospitals Buton & Lippo Plaza Buton and Siloam Hospitals Yogyakarta, as well as increased rental income from existing properties. As a result, the REIT's PSU was 2.15 cents, 0.5% higher than the same period last year.

Victor Tan, Managing Director of the manager of First REIT, commented:

"Contributions from our latest acquisitions and properties continued to strengthen the Trust's income and NPIs in the third quarter. The proposed acquisition of Bowsprit by OUE Lippo Healthcare Limited will be one of our growth drivers. First REIT will then be able to access a more diversified pool of assets through the right of first refusal agreements granted by OUE Lippo Healthcare Limited and PT Lippo Karawaci Tbk for their portfolios. This will effectively expand First REIT's geographical footprint in Asia, which will allow the Trust to eventually pursue more profitable acquisitions in order to generate stable returns for our unitholders. "

First REIT has recently seen its unit price drop considerably. For those who want to know more about development, you can head here.

Last but not least, we have EC Global Real Estate Investment Trust (SGX: BWCU), or EC World REIT. By way of introduction, EC World REIT is the first Chinese REIT specializing in logistics and e-commerce. It has properties mainly used for e-commerce, supply chain management and logistics.

For the quarter ended September 30, 2018, EC World REIT reported that its gross revenues increased by 0.1% over the previous year, reaching $ 23.9 million, while its net were up 0.5% to reach 22.2 million Singapore dollars. Similarly, the REIT's DPU increased 9.0% over the previous year to 1.57 cents. EC World REIT's DPU benefited from reduced spending and no 5% withholding tax billed in the third quarter of 2017. If the impact of the withholding tax is eliminated, annual growth the number of units subscribed by EC World REIT in the third quarter of 2018 would be 2.3%.

As at September 30, 2018, the REIT's gearing was 30.7% and its guaranteed occupancy rate was 99.2%.

Goh Toh Sim, Managing Director of EC World REIT, commented on the following perspectives:

"We are pleased to provide another quarter of healthy distributions to our unitholders despite macroeconomic hurdles and global uncertainties. EC World REIT's assets are generally unaffected, with tenants in the portfolio primarily serving the Chinese domestic market focused on domestic consumption. As such, we do not anticipate that the current global uncertainty will have a significant negative impact on the operation of our assets. "

Conclusion

That's three REITs trading at high yields of 8%. Investors should be reminded, however, that high returns alone are not enough to justify a purchase decision. It is therefore important for investors to research the future income outlook of the trust before committing capital.

The information provided is for general information purposes only and is not a personal investment or financial advice. Lawrence Nga, a contributor to Motley Fool in Singapore, does not own shares in any of the companies mentioned.