Investing in real estate investment trusts (REITs) has long been a popular choice for income-seeking investors. One powerful strategy that has gained attention is investing in REITs that consistently increase their dividend payouts. In this article, we’ll delve into four REITs that have demonstrated a remarkable track record of dividend growth for at least three consecutive years. We’ll also uncover the rationale behind this strategy and explore key criteria such as dividend yield and dividend growth.
The Rationale Behind the Strategy
Investing in REITs with consistent dividend growth is an attractive strategy for several reasons. Firstly, it provides investors with a reliable income stream, making it suitable for retirees or those seeking passive income. Secondly, dividend growth is often a sign of a REIT’s financial health and management’s confidence in the company’s future prospects. Lastly, REITs with increasing dividends tend to attract long-term investors, leading to potential capital appreciation over time.
Key Criteria for Evaluating REITs:
- Dividend Yield: A REIT’s dividend yield indicates the annual dividend payment as a percentage of its stock price. Investors should look for a sustainable dividend yield that is competitive within the industry. REITs are also obligated to payout 90% of its dividends to enjoy tax benefits. This makes dividend yield an important parameter to evaluate REITs.
- Dividend Growth: The consistency and growth rate of a REIT’s dividend payments are vital factors to consider. Examining a REIT’s track record of dividend growth over multiple years provides insight into its ability to generate stable cash flow and reward shareholders. We have selected 4 REITs below that have raised dividends for at least 3 times consecutively.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
Mapletree Pan Asia is a leading REIT that focuses on a diversified portfolio of properties across the Asia Pacific region. With a commitment to delivering sustainable income to investors, the REIT has consistently increased its dividend payout over the past three years. The REIT’s dividend yield of 6.86% reflects its ability to generate attractive returns for shareholders. Through strategic acquisitions and active portfolio management, Mapletree Pan Asia has positioned itself as an enticing option for investors seeking long-term dividend growth.
Over the last 4 years, the REIT has been growing its dividends consistently.
|Dividend per year||0.08||0.09||0.10||0.10|
Mapletree Logistics Trust (SGX: M44U):
Mapletree Logistics Trust is one of the largest logistics-focused REITs in Asia. With a portfolio of strategically located logistics properties, it has witnessed steady growth in its dividend payouts over the past three years. The REIT’s dividend growth rate of 5.7% highlights its ability to generate consistent cash flow and reward investors. Moreover, with a competitive dividend yield, Mapletree Logistics Trust offers income-seeking investors an opportunity to participate in the thriving logistics sector while enjoying a stable income stream.
Over the last few years, the REIT has been growing its dividends consistently.
|Dividend per year||0.07||0.08||0.08||0.08||0.09||0.09|
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT specializes in owning and operating data center properties. With the growing demand for data storage and processing, AJBU has experienced a strong performance, resulting in consistent dividend growth. The REIT’s dividend yield of 4.9% reflects its ability to generate attractive returns for investors. By capitalizing on the digital transformation trend, Keppel DC REIT offers investors a unique opportunity to benefit from the robust growth of the data center industry while enjoying a reliable income stream.
|Dividend per year||0.07||0.08||0.09||0.10||0.10|
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT focuses on investing in healthcare and healthcare-related properties, including hospitals and nursing homes. With a stable and recession-resistant industry, it has demonstrated consistent dividend growth over the past three years. The REIT’s dividend yield and growth potential make it an attractive option for income-seeking investors looking to tap into the growing demand for healthcare services. Parkway Life REIT’s commitment to delivering sustainable income and capital appreciation sets it apart in the market.
|Dividend per year||0.12||0.13||0.13||0.14||0.14||0.14|
Investing in REITs with a proven track record of consistent dividend growth can be a rewarding strategy for income-focused investors. The four REITs mentioned—Mapletree Pan Asia, Mapletree Logistics Trust, Keppel DC REIT, and Parkway Life REIT—demonstrate the potential for sustainable income generation and long-term growth. By considering key criteria such as dividend yield, dividend growth, and payout ratio, investors can make informed decisions when selecting REITs that align with their income objectives.