As we start this new week, a host of REITs will be releasing their quarterly results ended June 2019. There are two REITS in particular that are particularly worth noticing- CapitaLand Retail China Trust (SGX: AU8U) and Ascott Residence Trust (SGX: A68U).
Investors are starving for high-yielding REITS
CapitaLand Retail China Trust is set to release its earnings results on Wednesday, 31 July 2019. The China retail-focused trust delivered an impressive results in previous quarter with all headline numbers up from the previous year. Most importantly, the distribution per unit (DPU) before capital distribution was up 2% from the previous year.
What is Distribution per Unit (DPU)?
The DPU here refers to amount of cash payments made to individual unitholders of a specified income trust. The ratio is calculated by taking the total amount of cash distributions divided by the total amount of unit shares issued.
Largest Hospitality Trust in Asia Pacific?
Ascott Residence Trust will be releasing its first results since the announcement to merge with Ascendas Hospitality Trust (SGX:Q1P). The consolidated trust will position itself as the largest hospitality trust in Asia Pacific with assets worth around S$7.6 billion.
In the quarter ended 31st March 2019, Ascott Residence Trust’s adjusted DPU increased 4% due to better operating performance and lower financing costs. The increased in DPU was also contributed by the capital restructuring as Ascott Residence stripped Ascott Raffles Place Singapore at 64.3% above the book value and with an exit yield of 2%.
Since both companies here have done a good job historically at providing decent yields and moderate long-term capital appreciation, real estate investors should pay attention closely to these two trusts.