3 S-REITs to report higher DPU in the quarters to come

If you invest in REITs, you likely enjoy the steady stream of income that comes from assets.

Acquisitions, asset enhancement initiatives (AEIs), and organic rental growth are some of the strategies REITs can use to increase their asset base and rental income.

These three REITs are using a variety of catalysts to increase their DPU:

As of Jan 4, 2023, ARA US Hospitality Trust (ARAHT), had a portfolio of 36 select-service hotels in 19 different US states, totalling 4,707 rooms.

ARAHT revealed its plans to pay US$29 million for the Home2 Suites by Hilton Colorado Springs South Hotel recently. The acquisition not only adds significantly to distribution per stapled security (DPSS), but also allows the trust to expand its brand portfolio to include Hilton in addition to Hyatt and Marriott.

CapitaLand India Trust (CLINT) owns a portfolio of eight IT business parks, one logistics park, one industrial facility and one data centre development, and are all located in India.

CLINT had S$2.5 billion in assets under management (AUM) as of June 30, 2022. The REIT proposed the idea of purchasing International Tech Park Pune before the end of last month. CLINT will purchase the property for approximately S$221.9 million, which is DPU-accretive.

OUE Commercial REIT (OUECR) has a property portfolio that includes 1,643 upscale hotel rooms and 2.2 million square feet of premier office and retail space.

After an extensive 10-month renovation that was a part of an AEI, the refurbished rooms and suites were reopened. Hilton Singapore Orchard is currently running at full capacity, which puts it in a good position to meet growing demand from travellers as borders reopen.

CEO Mr Han Khim Siew believed that OUECR would experience an increase in NPI and distributable income, which should lead to an increase in DPU going ahead.