Which REIT Can Grow Their DPU Over The Years?

Most of us invest in REITs for their dividend yield but what makes a REIT exceptional is the ability of the REIT manager to grow the distribution per unit (DPU) over the years.

Below are the REITs with their annual historical distribution (in cents) I have held in my stock portfolio. The historical distribution can be easily found from the individual REIT website.

As you can see from the line chart I plotted above using the historical distribution, Parkway Life REIT and Frasers Commercial Trust have been able to grow their DPU consistently over the years as the line shows a gradual incline slope. Mapletree Commercial Trust should be able to form an incline slope as well but the line shows a decline because the 4Q2017 results are not yet announced.

Distribution per unit (DPU)for CapitaMall Trust and Suntec REIT looks rather flat over the last few years which reflects the current outlook for shopping malls.

Distribution per unit (DPU)for OUE Hospitality Trust declines as compared to FY14.

As you can see, by plotting the chart, it gives us a high level overview which are the REITs that is capable of growing their DPUs 5 years or more.

FY12 FY13 FY14 FY15 FY16 FY17 % Growth
ParkwayLife Reit 10.31 10.75 11.52 13.29 12.12 13.35 29.5%
CapitaMall Trust 9.46 10.27 10.84 11.25 11.13 11.16 18.0%
Mapletree Commercial Trust 6.487 7.372 8 8.13 8.62 6.77 ** 4.4%
OUE Hospitality Trust NA 2.9 6.74 6.55 4.61 5.14 (23.7)% ^
Frasers Commercial Trust 6.69 7.83 8.51 9.71 9.82 9.82 46.8%
Suntec Reit 9.49 9.328 9.4 10.002 10.003 10.005 5.4%

^ Based on FY14 to FY17 since IPO in FY17

** Not the full year results.

Current Dividend Yield of Stocks in My Stock Portfolio

Most of the companies and REITs in my stock portfolio has announced their 4QFY17 financial results. As such, I am able to tabulate the total dividends they are paying or have paid out in FY17.

I am sure everyone has read about the stock market in a sea of red recently. Is this a buying opportunity?

As a dividend investor, I am keen to know what is the current dividend yield for each of the stock I am holding. This will help me in the decision whether I should be buying more or stop buying.

Company Name Total Dividends

(FY17) (cents)

Current Price

(23 Feb 2018) (S$)

Current Dividend

Yield (%)

ST Engineering 15 3.39 4.42
ParkwayLife Reit 13.35 2.78 4.80
CapitaMall Trust 11.51 1.97 5.84
OUE Hospitality Trust 5.14 0.86 5.98
The Hour Glass 2 0.68 2.94
Kingsmen Creatives 2.5 0.63 3.97
Boustead 2 0.82 2.44
Frasers Commercial Trust 9.82 1.42 6.92
Suntec Reit 10.005 1.93 5.18

Based on the above, we can see that the REITs are generating an above 5% but below 6% dividend yield with the exception of Frasers Commercial Trust. The current level of dividend yield (5% to 6%) is not fantastic but acceptable.

I am more curious about Frasers Commercial Trust. With the news of HP vacating Alexandra Technopark and China Square Central undergoing renovations, I am surprise FCOT is still able to pay out 9.82 cents in total for FY17 and a dividend yield of 6.92%. A buying opportunity? At this moment, I am not sure as I have not read in details the latest financial results and follow up on its recent news. Perhaps this is something I can do next.

My Personal Analysis of Singtel

Recently, the share price of Singtel has breached its 5 year low, falling as low as S$3.36 as of 12th February 2018. This is after they announced their Q3FY18 net profit fell 8.5% to S$890 million from S$973 million one year ago. Singtel attributed the decline due to lower profits from subsidiaries Airtel, Telkomsel and Globe and also due to lower contribution from NetLink Trust following the divestment of its majority stake in the company.

I doubt the divestment of NetLink Trust will have much impact on Singtel’s FY18 profits as NetLink Trust only contributed S$73 million pre-tax profits in 2017. Read More