Real estate investment trusts (REITs) has been outperforming the market with double-digit returns year-till-date 2019. With most the REITs trading near their historical low dividend yields, is there still opportunity left in the REITs sector?
With that said, we have summarised the three highest-yielding REITs in the Singapore market right now.
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#1 Lippo Malls Indonesia Retail Trust
Lippo Malls Indonesia Retail Trust (SGX: D5IU) has been topping the list for the past twelve months. With a trading zone of S$0.20 to S$0.25, the Indonesian retail REIT has a dividend yield of around 8.5% to 9.5%.
So, what is the catch?
The REIT's distribution per unit (DPU) has been declining in the past few quarters. Some of the key reasons that contributed to the poor performances were higher operating expenses and weakening of Indonesian Rupiah. That said, backing by its sponsor Lippo Karawaci, the REIT managed to turn around and grew its DPU by 14.3% in the last quarter!
Source: REITs Insider Ratings: Lippo Mall's historical DPU
Nevertheless, the REIT would continue to face some challenges moving forward. The upcoming expiring master leases at Lippo Mall Kemang will have a negative impact on the DPU.