When it comes to investments, there are no definitive right or wrong choices – each option comes with its own strengths and weaknesses.

The same applies to deciding whether to invest in companies operating solely in one country or those with businesses spread across multiple countries.

With the former, you might experience a higher return on investment (ROI) if the business environment in that country performs exceptionally well. However, this also comes with the risk of significant losses if the market takes a downturn.

On the other hand, companies with a presence in multiple countries offer more stability. While a strong performance in one country may not drastically boost overall returns, a poor performance in one region is less likely to severely impact your investment.

Ultimately, the choice depends on your comfort level and investment goals.

In this post, I'll focus on the latter, where you will find 6 Singapore REITs with the most geographically diverse investments:

1. CapitaLand Ascott Trust (SGX: HMN)

CapitaLand Ascott Trust (CLAS) invests in income-producing real estate and real estate-related assets used predominantly as serviced residences, rental housing properties, student accommodation, and other hospitality assets. Its properties are mostly operated under the Ascott, Somerset, Quest, and Citadines brands.

As of 30 June 2024, CLAS’ portfolio comprises 102 properties with more than 18,000 units in 45 cities across 16 countries in the world, and they are as follows (with the number of properties, along with their revenue contribution in brackets):

• Australia (13 properties, 11.4%)
• Belgium (2 properties, 1.0%)
• China (5 properties, 2.9%)
• France (12 properties, 7.8%)
• Germany (5 properties, 3.1%)
• Indonesia (3 properties, 1.7%)
• Ireland (1 property, 1.4%)
• Japan (30 properties, 15.8%)
• Malaysia (1 property, 0.4%)
• Singapore (4 properties, 16.3%)
• South Korea (2 properties, 1.9%)
• Spain (1 property, 0.9%)
• The Philippines (2 properties, 1.7%)
• The United Kingdom (5 properties, 11.4%)
• The United States (11 properties, 20.0%)
• Vietnam (5 properties, 2.3%)

To break down by asset types, 53 are serviced residences, 16 are hotels, 24 are rental housing, and 9 are student accommodations.

The following is CLAS’ financial performance for the 1st half of FY2024 ended 30 June (i.e., 1H FY2024):

	1H FY2023	1H FY2024	% Variance
Gross Revenue (S$’mil)	$346.9m	$386.4m	+11.4%
Total Amount Available for Distribution (S$’mil)	$96.3m	$96.5m	+0.2%
Distribution Per Stapled Security (S$)	$0.0278	$0.0255	-8.3%

Gross revenue rose 11.4% to S$386.4 million on the back of sustained lodging demand and stronger operating performance.

Total amount available for distribution remained stable at S$96.5 million.

However, CLAS’ distribution per stapled security (DPS) fell by 8.3% to S$0.0255. If non-periodic items (the realised exchange gain arising from the settlement of cross currency interest rate swaps) are excluded, DPS is down by about 1.2% to S$0.0241.

CLAS’ portfolio Revenue Per Available Unit (RevPAU) increased by 4% to S$155, due to an increase in room rates, with Japan and USA leading the growth.

Average occupancy of the portfolio remained stable at around 75%.

Debt profile remains healthy, with its aggregate leverage at 37.2%, interest coverage at 3.7x, average cost of debt at 3%. It also has 72% of debt hedged to fixed rates.

2. Mapletree Logistics Trust (SGX: M44U)

Back in July 2005 when Mapletree Logistics Trust (MLT) was listed on the Main Board of the Singapore Exchange, it was the first Asia-focused REIT in the country. The REIT’s investment focus is on income producing logistics real estate and real estate-related assets.

As of 30 June 2024, its portfolio comprises 188 properties in the following 9 countries (with the number of properties, along with their revenue contribution in brackets):

• Australia (14 properties, 7.1%)
• China (43 properties, 18.3%)
• Hong Kong (9 properties, 17.0%)
• India (3 properties, 1.1%)
• Japan (24 properties, 11.4%)
• Malaysia (14 properties, 5.5%)
• Singapore (48 properties, 27.4%)
• South Korea (21 properties, 8.2%)
• Vietnam (12 properties, 4.0%)

[Sidenote: I understand some investors are concerned about headwinds faced in China. I have recently published a video presentation to share my thoughts on this, and you can check it out
here.]

The following is MLT’s financial performance for the 1st quarter of FY2024/25 ended 30 June (i.e., Q1 FY2024/25):

	Q1 FY2023/24	Q1 FY2024/25	% Variance
Gross Revenue (S$’mil)	$182.2m	$181.7m	-0.3%
Net Property Income (S$’mil)	$158.1m	$156.7m	-0.9%
Amount Distributable to Unitholders (S$’mil)	$112.0m	$103.7m	-7.4%
Distribution Per Unit (S$)	$0.0271	$0.02068	-8.9%

The slight decline in MLT’s gross revenue and net property income (by 0.3% and 0.9% respectively to S$181.7 million and S$156.7 million) can be attributed to a weaker performance in China, the absence of revenue from divested properties, along with a weaker Japanese Yen and Chinese Yuan against the strong Singapore Dollar. However, this was partially offset by higher contribution from its properties in Singapore and Hong Kong, as well as newly acquired properties completed in Q1 FY2024/25 and in FY2023/24.

Distribution per unit (DPU) also stumbled by 8.9% to S$0.02068, due to higher borrowing costs (which rose by 9.4%), a lower divestment gain, as well as an enlarged unit base.

MLT’s portfolio occupancy was stable at 95.7%, with positive rental reversions recorded in all of the REIT’s markets except for China (which recorded a negative reversion of -11.3%). The overall rental reversion (including China) was at +2.6%. If China was excluded, then the overall rental reversion was at +4.6%.

Its debt profile is a healthy one – with aggregate leverage at 39.6%, interest coverage ratio at 3.6x, and weighted average annualised interest rate at 2.7%. The REIT also has 83% of borrowings hedged at fixed rates.

3. Keppel DC REIT (SGX: AJBU)

Keepel DC REIT was the first pure-play data centre REIT when it was listed on the Singapore Exchange in December 2014. It invests in income-producing real estate assets used primarily for data centre purposes, as well as real estate and assets necessary to support the digital economy.

As of 30 June 2024, Keppel DC REIT’s portfolio comprises 23 data centres across 10 countries, as follows:

• Australia (1)
• China (3)
• Germany (2)
• Ireland (2)
• Italy (1)
• Japan (1)
• Malaysia (1)
• Singapore (6)
• The Netherlands (3)
• The United Kingdom (3)

In terms of revenue breakdown for each geographic location, it is as follows:

• Singapore (56%)
• Ireland (11%)
• China (8%)
• Australia (7%)
• Germany (6%)
• The Netherlands (5%)
• Other Countries (7%)

The following table is Keppel DC REIT’s financial performance for the 1st half of FY2024 ended 30 June (i.e., 1H FY2024):

	1H FY2023	1H FY2024	% Variance
Gross Revenue (S$’mil)	$140.5m	$157.2m	+11.9%
Net Property Income (S$’mil)	$127.4m	$132.6m	+4.2%
Distributable Income (S$’mil)	$91.3m	$80.9m	-11.4%
Distribution Per Unit (S$)	$0.05051	$0.04549	-9.9%

For 1H FY2024, Keppel DC REIT’s gross revenue climbed by 11.9% to S$157.2 million mainly due to higher variable rent arising from the settlement sum (net of related expenses and GST) received related to the DXC Dispute, as well as positive rental reversions and escalations.

However, due to an 87.1% jump in property expenses mainly due to loss allowance made for the receivables from the Guangdong Data Centres, net property income was up by just 4.2% to S$132.6m.

DPU declined by 9.9% to S$0.04549 mainly due to loss allowance made for the receivables from the Guangdong Data Centres, higher finance costs, as well as the depreciation of foreign currencies against the Singapore Dollar. However, this was partially offset by the increase in rents contributed by strong positive reversions and escalation, as well as higher variable rent arising from the settlement sum received relating to the DXC Dispute.

Portfolio occupancy remains at a high level of 97.5%, with the REIT managed to renew a major contract in Singapore with a positive rental reversion of above 40% in 1H FY2024.

Keppel DC REIT’s debt profile is also a healthy one – with aggregate leverage at 35.8%, interest coverage ratio at 5.1x, and average cost of debt at 3.5%. It has 74.0% of borrowings fixed through interest rate swaps.

4. CapitaLand Ascendas REIT (SGX: A17U)

CapitaLand Ascendas REIT (CLAR) is Singapore’s first and largest-listed business space and industrial REIT. Its investment focus is on technology and logistics properties in developed markets.

As of 30 June 2024, CLAR’s portfolio comprises 229 properties across 3 segments (Business Space & Life Sciences, Industrial & Data Centres, as well as Logistics) in the developed markets of Singapore, the United States, Australia, and in the United Kingdom/Europe, valued at S$16.9 billion (with Singapore comprising 64% of the total portfolio asset value, and the remaining countries in Australia, the United States, as well as the United Kingdom/Europe at 14%, 12%, and 10% of the total portfolio asset value respectively.)

Here is CLAR’s financial performance recorded for the 1st half of FY2024 ended 30 June (i.e., 1H FY2024):

	1H FY2023	1H FY2024	% Variance
Gross Revenue (S$’mil)	$718.1m	$770.1m	+7.2%
Net Property Income (S$’mil)	$508.8m	$528.4m	+3.9%
Total Amount Available for Distribution (S$’mil)	$327.5m	$330.8m	+1.0%
Distribution Per Unit (S$)	$0.07719	$0.07524	-2.5%

CLAR’s gross revenue increased by 7.2% to S$770.1 million, mainly due to the full period contribution from newly acquired properties in Singapore and in the United Kingdom, and also contribution by the completed properties in Australia and in the United States. However, this was partially offset by properties in Australia and Singapore that were divested, along with the decommissioning of properties in Singapore and in the United Kingdom.

As a result of a 15.5% increase in property expenses mainly due to the properties acquired and completed, the REIT’s net property income was up by 3.9% to S$528.4 million.

DPU dipped by 2.5% to S$0.07524 as a result of a 16.3% increase in finance cost and an enlarged unit base.

CLAR’s portfolio occupancy remains at a high level of 93.1%, with an overall rental reversion of +11.7% (where, all new and/or renewed leases in all the geographical locations recorded a positive rental reversion).

Debt profile is also a healthy one – with aggregate leverage at 37.8%, interest cover ratio at 3.7x, and weighted average all-in debt cost at 3.7%. CLAR also has 83.0% of its total debt hedged at fixed rates.

5. Mapletree Pan Asia Commercial Trust (SGX: N2IU)

Mapletree Pan Asia Commercial Trust (MPACT) invests in commercial properties (used for retail and/or office purposes) in key gateway cities in Asia.

As of 30 June 2024, the REIT’s portfolio comprises 18 properties in 5 countries, as follows (with the number of properties, along with their revenue contribution in brackets):

• China (2 properties, 9%)
• Hong Kong (1 property, 21%)
• Japan (9 properties, 8%)
• Singapore (5 properties, 60%)
• South Korea (1 property, 1%)

[Sidenote: I understand that a number of unitholders are concerned about the REIT’s investments overseas. With that in mind, I have published a video presentation to share my thoughts about this, and you can watch it
here.]

The following is MPACT’s financial performance for the 1st quarter of FY2024/25 ended 30 June (i.e., Q1 FY2024/25):

	Q1 FY2023/24	Q1 FY2024/25	% Variance
Gross Revenue (S$’mil)	$237.1m	$236.7m	-0.2%
Net Property Income (S$’mil)	$179.2m	$179.4m	+0.1%
Amount Available for Distribution to Unitholders (S$’mil)	$114.8m	$110.6m	-3.5%
Distribution Per Unit (S$)	$0.0218	$0.0209	-4.1%

MPACT’s gross revenue slid by 0.2% to S$236.7 million, as strong performance and increased contributions from the Singapore properties were offset by weaker contributions from the overseas properties mainly due to the appreciation of the Singapore Dollar against the Japanese Yen and the Chinese Yuan.

However, due to a 1.1% decline in property operating expenses from lower utility expenses and property tax, net property income inched up by 0.1% to S$179.4 million.

The 4.1% fall in DPU to S$0.0209 in 1H FY2024/25 was due to foreign exchange impact from a stronger Singapore Dollar against the Japanese Yen, Chinese Yuan, and Korean Won, along with a 9.8% rise in finance cost (due to higher interest rates on Singapore Dollar, Hong Kong Dollar, and Japanese Yen borrowings).

MPACT’s overall portfolio occupancy has remained at a high level of 94%, with a positive rental reversion of 5.2% achieved for new and/or renewed leases in the quarter (particularly, a positive rental reversion was recorded for the properties in Singapore, while a negative rental reversion was recorded for all of its overseas properties).

Debt profile continues to remain healthy as well – with aggregate leverage at 40.5%, interest coverage ratio at 2.8x, and weighted average all-in cost of debt at 3.54%. MPACT has 79% of borrowings hedged at fixed rates.

6. Frasers Logistics & Commercial Trust (SGX: BUOU)

With an investment focus in Asia-Pacific region and Europe (including the United Kingdom), Frasers Logistics & Commercial Trust (FLCT) invests in a diversified portfolio of income-producing properties used predominantly for logistics and industrial purposes, commercial purposes (comprising primarily CBD office space), or for business park purposes (comprising primarily non-CBD office space and/or research and development space).

As of 31 March 2024, FLCT’s portfolio comprises 112 properties in 5 countries, as follows:

• Australia (65)
• Germany (33)
• Singapore (1)
• The Netherlands (6)
• The United Kingdom (7)

Total value of FLCT’s portfolio is at S$6.8 billion, and here’s the breakdown in geographical terms (with the percentage of concentration in terms of portfolio value in brackets): Australia (48.4%), Germany (25.7%), United Kingdom (11.0%), Singapore (10.0%), and The Netherlands (4.9%).

The following table is FLCT’s financial performance for the 1st half of FY2023/24 ended 31 March 2024 (i.e., 1H FY2023/24):

	1H FY2022/23	1H FY2023/24	% Variance
Gross Revenue (S$’mil)	$208.0m	$216.0m	+3.9%
Net Property Income (S$’mil)	$157.9m	$158.8m	+0.6%
Distributable Income (S$’mil)	$130.8m	$130.7m	-0.1%
Distribution Per Unit (S$)	$0.0352	$0.0348	-1.1%

The 3.9% improvement in FLCT’s gross revenue to S$216.0 million was due to positive rent reversions and rental escalations, and contributions from Ellesmere Port, Connexion II and Worcester. However, this was partially offset by higher vacancies in commercial assets.

Due to a 14.3% increase in property operating expenses mainly due to higher non-recoverable land taxes in Australia, utilities, repair, and maintenance expenses, net property income inched up by just 0.6% to S$158.8 million.

FLCT’s DPU for 1H FY2023/24 fell by 1.1% to S$0.0348 due to higher finance cost.

Portfolio occupancy remain at a high level of 94.3%, with positive rental reversions achieved (at +3.8% for incoming vs. outgoing, and at +14.2% for average vs. average).

FLCT has a very healthy debt profile – with its aggregate leverage at 32.7% (at this level, it is one of the lowest among all the Singapore REITs), interest coverage ratio at 5.9x, and cost of borrowings at 2.6% (at this level, it is also among the lowest when compared against all of the other Singapore REITs). The REIT has 75.9% of borrowings hedged at fixed rates.

Closing Thoughts

Except for FLCT, the other 5 REITs not only have properties in Singapore, but the city state is also a huge contributor to the individual REIT’s gross revenue for most of them.

Another thing to note is that, all the 6 REITs I have looked at in this post have a strong portfolio occupancy rate (of above 90%), as well as a healthy debt profile (where their aggregate leverage is a good distance from the regulatory limit of 50.0% set by the Monetary Authority of Singapore; at the same time, they also have more than 75% of borrowings hedged at fixed rates).

The only thing is that, as a result of the high interest rate environment we are still in at this point in time, the jump in borrowing costs have eroded the REITs’ DPU. However, with the US Federal Reserve poised to commence a series of interest rate cuts starting next month (September), we could see borrowing costs coming down eventually, and DPU slowly recovering – but like I have mentioned in my previous posts, I am of the opinion that any year-on-year improvement in DPU will likely only come in the calendar year 2026, unless there is a black swan event, and the US Federal Reserve starts cutting rates aggressively.

With that, I have come to the end of my post today on the 6 Singapore REITs that are the most geographically diversified. Do note that all the opinions expressed in this post are purely mine which I am sharing for educational purposes only. Additionally, the contents within does not constitute any buy or sell calls for any of the REITs. You are strongly encouraged to do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I am a unitholder of CapitaLand Ascendas REIT, Keppel DC REIT, Mapletree Logistics Trust, and Mapletree Pan Asia Commercial Trust.

The post Expanding Your Horizons: 6 Singapore REITs with a Global Diversification for Your Investment Portfolio first appeared on The Singaporean Investor.