The turbulence experienced in the stock market this year has led many investors to wonder if it still makes sense to invest in the stock market.
After all, volatility has remained elevated and pessimism continues to reign as Covid-19 remains untamed.
Yet, some businesses have managed to display resilience and adaptability as their operations have not been adversely impacted by this crisis.
REITs have been similarly hit across the board, but some have managed to pick themselves back up.
In an era of low-interest rates, many REITs have conducted acquisitions to boost their distribution per unit (DPU) and increase their exposure to attractive regions.
Here are four REITs that are poised to grow over time due to recent acquisitions.
1. Mapletree Industrial Trust
Mapletree Industrial Trust: Boosting the Big Data Wave
Who’s “Mapletree” and What They’re Doing
Mapletree Industrial Trust (MIT) is your go‑to REIT that plays real estate in both the local scene of Singapore and the sprawling U.S. west coast. Its portfolio is a solid mix of 84 industrial sites in Singapore and 27 high‑tech data centers across the U.S., making a combined $6.6 billion in assets under management (as of September 30, 2020).
Recent Moves That Keep the Engine Turning
MIT has been busy lately, grabbing two big pieces of property in a short span:
- June: Took the remaining 60 % stake in a cluster of 14 U.S. data centers—think of it as a “full‑scale brain‑boost” move.
- September: Acquired a dual‑purpose property—a data center paired with an office space—in Virginia, adding both computing muscle and a few desks for future tenants.
Why It Matters for Unit Holders
These acquisitions are all about resilience and value:
- They fortify the property mix, giving the REIT a steadier income flow even when markets shift.
- They should raise the DPU (Dividend per Unit), giving shareholders a little more green in their pockets.
In short, MIT is throwing a serious weight of data‑center gold into its portfolio, breathing life into its assets and sweetening the dividend stack for those holding a piece of this growing real‑estate unicorn.
2. Elite Commercial REIT
Elite Commercial REIT is a recently-listed REIT that owns a portfolio of commercial assets located in the UK.
The REIT owns a portfolio of 97 properties located across the UK. These properties are anchored by a stable tenant, the Department for Work and Pensions (DWP), the UK’s largest public service department.
Elite recently announced the acquisition of 58 commercial properties, also in the UK, to add on to its initial IPO portfolio.
This acquisition will allow the REIT to gain exposure to London and also increase pro-forma DPU by 3.2 per cent.
3. Suntec REIT
Suntec REIT owns a mix of commercial and retail properties in both Singapore and Australia.
The REIT has been listed since December 2004 and has paid out consistent distributions in the last 15 years.
ALSO READ: 3 REITs that are paying out more dividends
Last month, Suntec announced its first foray into the UK with the acquisition of a 50 per cent stake in the Nova properties for GBP 430.6 million.
Not only is this transaction DPU-accretive, but it also opens up the REIT to a new country and helps to further diversify its portfolio.
4. Ascendas REIT
Ascendas REIT is Singapore’s first and largest industrial and business space REIT, with a portfolio consisting of 197 properties worth $12.8 billion as of June 30, 2020.
The REIT sits under CapitaLand Limited ‘s stable of REITs and boasts a list of reputable companies such as Singtel, DBS Group Holdings Ltd and Citibank as major tenants.
In late September, the REIT added to its growing stable of properties with the acquisition of a suburban office in Sydney’s Macquarie Park.
The transaction was both DPU-accretive and helped to further diversify the REIT’s exposure to suburban office property.
Get smart: Anchored by strong sponsors
These acquisitions have one thing in common: the presence of a strong sponsor for each of the REITs.
Suntec REIT has ARA Asset Management (“ARA”) as a sponsor. ARA has around $110 billion worth of gross assets as of June 30, 2020.
ALSO READ: 3 REITs trading near their all-time highs
MIT’s sponsor is Mapletree Investments Pte Ltd (MIPL), which manages four Singapore REITs and six private equity real estate funds. MIPL owns and manages a total of $60.5 billion worth of real estate assets as of March 31, 2020.
Ascendas REIT has a reputable sponsor in CapitaLand, while Elite Commercial REIT’s sponsor, Elite Partners Capital, manages more than $1 billion of assets.
This article was first published in The Smart Investor. Disclaimer: Royston Yang owns shares in Suntec REIT and DBS Group Holdings Ltd.
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