When the word “REITs” is mentioned, most investors will think of them as stable, consistent dividend vehicles.
This assumption is true to an extent, as the main purpose of REITs is to provide a stable source of dividend flow from consistent rental income enjoyed by the REIT.
After all, REITs are mandated to pay out at least 90% of their distributable income to enjoy tax exemptions.
With only 10% of net profit retained, REITs appear to have little wiggle room for reinvestment for growth.
In reality, however, many REITs have, over the years, enjoyed consistent and steady growth in both their portfolio of properties, as well as their distribution per unit (DPU).
As such, investors in these REITs can enjoy both capital gains and rising dividends.
The trick is to find the right REITs that can grow.
With that in mind, here are three methods that REITs make use of to grow their DPU over time....