3 Top REITs for Your CPF Investment Account

The Singapore’s Central Provident Fund (CPF) offers Singaporeans a good way to save for retirement. At present, if you are below 55 years old, the CPF Ordinary Account has an interest rate of 2.5%. However, for the first S$20,000, the interest is 3.5%. For investors seeking higher returns for their OA accounts, REITs might be a good choice for investors to invest on.  Here are 3 top REITs you might wish to consider for your CPF Investment Account.

CapitaLand Ascendas REIT

CapitaLand Ascendas REIT (CLAR) reported its half year results ended 30 June 2024 on 30 July 2024. Net property income is up 3.9% to S$528.4 million while distributable income is up 1% to S$330.8 million. However, DPU dipped slightly by 2.5% to 7.524 cents. This translate to a dividend yield of more than 5.3%. This is higher than the CPF OA interest of 2.5%. CLAR maintained a healthy portfolio occupancy of 93.1% with positive portfolio rental reversion of 13.4%. Gearing ratio is manageable at 37.8% with cost of debt of 3.7%. Interest cover is still healthy at 3.7x. With a favourable financial metrics together with a diversified portfolio of properties, CLAR is definitely one of the 3 top REITs for your CPF Investment Account. You can view the REIT website here. 

Frasers Centrepoint Trust

Frasers Centrepoint Trust (FCT) reported its business update for 9 months ended 30 June 2024 on 24 July 2024. Portfolio occupancy remains very healthy at 99.7%. Portfolio shopper traffic for 3Q24 increased by 4.1% y-o-y while portfolio tenants’ sales for 3Q24 increased by 0.7% y-o-y. DPU declared for the half year ended 31 March 2024 was 6.022 which translate to an annualized dividend yield of more than 5%. Gearing ratio is at 39.1% with average cost of debt of 4.2%. Interest cover is 3.26x. With the acquisition of the additional 24.5% effective interest in NEX to make full contribution from 2H24 onwards and Tampines 1 AEI on schedule to complete by September 2024, FCT should be considered as of the 3 top REITs for your CPF Investment Account. You can view the REIT website here. 

Parkway Life Real Estate Investment Trust

Parkway Life Real Estate Investment Trust (PLife REIT) reported its half year results ended 30 June 2024 on 26 July 2024. As expected, PLife REIT did not disappoint its shareholders. Though gross revenue dropped by 2.7% to S$72.4 million and net property income dropped by 2.5% to S$68.3 million, DPU for 1H2024 increased by 3.5% to 7.54 cents. This translate to an annualized dividend yield of more than 3.7%. Gearing ratio remains healthy at 35.3% with a very low cost of debt of 1.35%. Interest cover is very high at 10.6x. Although PLife REIT has a low dividend yield of 3.7% and is not much higher than CPF interest rate, it has never dropped its DPU before since its listing in 2007. In fact, PLife REIT has provided an annualized return of 7.7% since its listing. This is much better than the CPF interest rate and hence should be considered as one of the 3 top REITs for your CPF Investment Account. You can view the REIT website here.  I have highlighted 3 top REITs for your CPF Investment Account. However, investors need to take note that the amount in your CPF is very safe and also provide a slow and steady return compared to investing in REITs.