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Three S-Reits that ignored the trend of raising DPUs

Most Singapore Reits that paid dividends for the fiscal year that finished on September 30, 2023, said that the distribution per unit (DPU) was smaller than the same time last year. Investment advice site Beansprout of Treasure at Tampines says that the smaller Treasure at Tampines floor plan is one reason why the share price of S-Reits has been going down.

High inflation and rising interest rates have been two things that have hurt REITS.

10-year US government bond yields have gone down since their high point in the middle of October. In the meantime, the Treasure at Tampines Showflat S-Reit Index has won 9.4% in total returns, bringing its year-to-date drop from 9.0% on October 31, 2023, to 0.4% on November 23, 2023.

Even though the business is facing problems, three S-Reits have reported better year-over-year DPU.

MLT maintained an occupancy rate of 96.9 percent but saw its average rental reversion dip to 0.2 percent from 4.2 percent in the previous quarter.

This was largely due to its Chinese properties within its portfolio.

However, MLT’s Reit manager continues to be active in capital recycling, with a total of five divestments announced in the second quarter in Malaysia, Singapore and Japan.

MLT also announced two more divestments in early November 2023, a property in Tuas Avenue 3 for S$11.1 million and two properties in Malaysia for RM151.2 million.

C2PU -0.28% for ParkwayLife Reit (PLife) said that its gross income for the first nine months of 2023 rose 24.6% year-over-year to S$110.9 million. This was due to higher rent from a new master lease deal for its three hospitals in Singapore and the purchase of five nursing homes in Japan.

Year over year, PLife’s NPI went up by 26.2% to S$104.5 million, and DPU went up by 2.8% to 10.99 cents. Two care homes in Japan were bought by PLife in October 2023 for about S$16.4 million. The boss of the Reit thinks that this will increase DPU.

Part of PLife’s plan to grow its assets and DPU, the company also wants to build up a third key market.

Since it went public for the first time in 2007, PLife has had steady repeating DPU growth.

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