Pivoting to promising segments an increasingly vital growth driver for Reits

CAPITAMALL Trust (CMT) became Singapore's first listed real estate investment trust (Reit) in July 2002. In its first 5 full years as a listed entity, distribution per unit (DPU) rose 66 per cent between 2003 and 2007, or a compound annual growth rate of nearly 14 per cent. Acquisitions and asset enhancements were the 2 most important drivers of DPU growth for CMT in its early years.

In recent times, as digitalisation and the Covid-19 pandemic dim prospects of certain property types and create demand in other areas, pivoting a portfolio to a new asset class has become an increasingly vital growth driver for Reits.

Mapletree Industrial Trust (MIT) is a prime example of a Reit that has successfully pivoted by embracing a new class of assets in data centres.