Which REIT Can Grow Their DPU Over The Years?

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.

FY12FY13FY14FY15FY16FY17% Growth
ParkwayLife Reit10.3110.7511.5213.2912.1213.3529.5%
CapitaMall Trust9.4610.2710.8411.2511.1311.1618.0%
Mapletree Commercial Trust6.4877.37288.138.626.77 **4.4%
OUE Hospitality TrustNA2.96.746.554.615.14(23.7)% ^
Frasers Commercial Trust6.697.838.519.719.829.8246.8%
Suntec Reit9.499.3289.410.00210.00310.0055.4%

^ Based on FY14 to FY17 since IPO in FY17

** Not the full year results.

WeWork Leases Office Space From CapitaMall Trust and Frasers Commercial Trust

WeWork Leases Office Space From CapitaMall Trust and Frasers Commercial Trust

Recently, while I was flipping through the financial results presentation slides of two REITs, namely CapitalMall Trust and Frasers Commercial Trust, I came across this company called “WeWork” that seem to take up quite a substantial square feet of office space in these two REITs.

WeWork Singapore has committed to lease around 28,700 square feet of space at one of China Square Central’s heritage shophouse blocks. The company had leased 40,000 square feet of office space across two floors of Funan’s North Office Block, becoming Funan’s first office tenant.

Being curious, I looked up the term “WeWork”. This is what I found

WeWork is an American startup company founded in 2010 that provides shared workspace across various countries. Recently, they have acquired Singapore based company Spacemob.

Based on my findings, WeWork has a current valuation of US$20 billion. Wow! That sounds like a strong and robust tenant for both of these two REITs I am holding.