4 Singapore REITs Carrying Out Acquisitions to Boost Their Distributions

Core Insights - The REIT sector is experiencing improvement due to moderating interest rates and declining inflation, with several REITs making acquisitions to enhance their asset base and increase distributions for investors [1] Group 1: CapitaLand Ascott Trust (CLAS) - CLAS is Asia-Pacific's largest lodging trust with total assets of S$8.8 billion and a portfolio of 101 properties across 16 countries [2] - CLAS has acquired three freehold rental housing properties in Japan for JPY 4 billion (approximately S$34.2 million), located in Osaka and Kyoto [2] - The projected net operating income (NOI) entry yield for this acquisition is 4%, significantly higher than the exit NOI yield of 0.4% from a previous divestment [3] - The acquisition is expected to result in a 0.3% accretion to CLAS's distribution per stapled security (DPSS) [3] - The properties have an average occupancy of 97% and will contribute to a stable income stream, with rents in Osaka and Kyoto expected to rise by 10% to 15% over the next five years [4][5] Group 2: AIMS APAC REIT (AAREIT) - AAREIT, an industrial REIT, is acquiring Framework Building for approximately S$56.65 million, projected to have an initial net property income (NPI) yield of 8.1% [6] - The acquisition is expected to add 2.5% to AAREIT's distribution per unit (DPU) if fully funded by debt [6] - The property has a total net lettable area of 16,082 square meters and is 97% occupied, with potential for value-add enhancements [7][8] Group 3: CapitaLand Integrated Commercial Trust (CICT) - CICT is acquiring 55% of the commercial component of CapitaSpring for S$1.05 billion, with an entry yield in the low-4% region [9] - The total acquisition outlay is approximately S$482.3 million, funded through a private placement of units, expected to result in a 1.1% DPU accretion [10] - Following the acquisition, CICT's pro-forma aggregate leverage is expected to rise slightly from 37.9% to 38.3% [10] Group 4: United Hampshire US REIT (UHREIT) - UHREIT owns a diversified portfolio valued at around US$731 million and recently purchased Dover Marketplace for approximately US$16.4 million, below independent valuation [11] - The acquisition is fully funded by proceeds from a previous divestment and is expected to provide a 2% uplift to UHREIT's DPU [12] - Dover Marketplace has a committed occupancy of 96.1% and a long weighted average lease expiry of 9.7 years [12]