Real estate investment trusts (REITs) have gained popularity globally for investors looking to invest in property while receiving a regular stream of income.

REITs own income-generating portfolios, mostly comprising commercial, retail or industrial properties, and pay out at least 90% of their distributable net income as distributions to unitholders so as to enjoy tax exempt status. REITs allow the investor to own a stake in a quality portfolio with relatively low capital outlay compared to buying and owning property directly. In a nutshell, REITs offer investors exposure to the real estate market with a diversified portfolio of properties generating sustainable tax-free income.

In recent years, Singapore-listed REITs (S-REITs) have been one of the more popular investments on the Singapore Exchange (SGX) with an average distribution yield of 6.70 %* delivered in 2016.


Diversification

REITs typically own diversified portfolios with a vibrant tenant mix. Unlike buying physical real estate, which requires sizeable capital and therefore often lack property and tenant diversification, with REITs investors can own multiple assets with tenants from various business sectors. This lowers single-asset or single-tenant risks.

Affordability

Investing in REITs allows investors to hold stakes in prime assets beyond the reach of most investors such as offices in Marina Bay Financial District, retail malls along Orchard Road and sizeable business parks or logistics properties.

Liquidity

Buying and selling REITs is far easier than doing the same with physical property. REITs are traded like any other stock on the stock exchange throughout the trading day which is akin to having an open-house for your property almost every day of the week. Transaction costs for trading REITs are minimal with low brokerage costs, compared with prohibitively high stamp duties and property agent fees.

Sustainable Tax-free Income

REITs in Singapore delivered an average return of 6.7%* annually in 2016, with distributions paid on a quarterly or half-yearly basis to provide stable income throughout the year. Moreover, these distributions are mostly tax-exempted as REITs do not pay tax on rental income collected and individual investors of REITs also do not pay income tax on distributions.

Transparency & Flexbility

Similar to trading stocks listed on the stock exchange, the process of buying or selling a REIT is transparent and flexible.

*Source: SGX MyGateway

Top Performer: Viva Industrial Trust

One such REIT is Viva Industrial Trust (VIT; SGX: T8B), a Singapore-focused business park and industrial REIT that listed on the Mainboard of the Singapore Exchange (SGX) in November 2013. VIT invests in a diversified portfolio of income-producing real estate - predominantly business parks, light industrial and logistics properties - in Singapore and elsewhere in the Asia Pacific region.

These properties cover an aggregate gross floor area of 3.9 million sq ft and are strategically located in key business parks and established industrial clusters. Its nine properties serve over 146 tenants - including small and medium-sized enterprises (SMEs), government-linked companies (GLCs) and multinational corporations (MNCs) - with more than 40.3% of them in information and communication technology, e-business or data centre operations. VIT is one of the fastest growing industrial REITs in Singapore. It has almost doubled its asset size from S$743 million at the time of its IPO in November 2013, to close to S$1.3 billion as at 31 June 2017. The trust has also delivered an impressive 8.4% - 9.9% stable distribution yield since listing.

Occupancy at its properties has also been growing steadily, from 70.1% at the time of its IPO to 89.8% at the end of 2016. As VIT's portfolio is Singapore focused, it features relatively low country risk and has no foreign currency risk exposure. VIT is managed by a professional team with extensive experience in the industrial property sector.

Click here to learn more about VIT.

Net Property Income (NPI) Performance Income since IPO (S$’m)

*Relates to the period from 4 November 2013 (the “Listing Date”)
to 31 December 2013



VIT’s tenant mix – resilient to economic downturn

Breakdown of Trade Sector by Underlying Gross Rental Income
Total of 146 tenants, of which 40.3% of tenants are in information technology, e-business or data centre operations.

58.1% of tenants are MNC or GLC


Breakdown of Trade Sector by Underlying Gross Rental Income*

* Based on monthly gross rental income for the month of March 2017, excluding the rental income from the UEBH Hotel Leased Premises.

Important Notice

This content is for information purposes only and does not constitute or form part of an offer, invitation or solicitation of any offer to purchase or subscribe for any Stapled Securities of Viva Industrial Trust (“VIT”) in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

The value of the Stapled Securities and the income derived from them may fall as well as rise. The Stapled Securities are not obligations of, deposits in, or guaranteed by, Viva Industrial Trust Management Pte. Ltd., in its capacity as manager of Viva Industrial Real Estate Investment Trust (“VI-REIT”, and the manager of VI-REIT, the “REIT Manager”), Viva Asset Management Pte. Ltd., in its capacity as trustee-manager of Viva Industrial Business Trust (“VI-BT”, and the trustee-manager of VI-BT, the “Trustee-Manager”, and collectively with the REIT Manager, the “Managers”), Perpetual (Asia) Limited (formerly known as The Trust Company (Asia) Limited), as trustee of VI-REIT, or any of their respective affiliates.

An investment in the Stapled Securities is subject to investment risks, including the possible loss of the principal amount invested. Stapled Securityholders have no right to request that the Managers redeem or purchase their Stapled Securities while the Stapled Securities are listed. It is intended that Stapled Securityholders may only deal in their Stapled Securities through trading on Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing of the Stapled Securities on the SGX-ST does not guarantee a liquid market for the Stapled Securities.

This content may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of VIT. The forecast financial performance of VIT is not guaranteed. A potential investor is cautioned not to place undue reliance on these forward-looking statements, which are based on the Managers’ current view of future events.