REITs have been a resilient asset class that continues to dole out steady distributions despite the twin challenges of high inflation and surging interest rates.
One of the methods used by REITs to grow their assets and distribution per unit (DPU) is acquisitions.
High interest rates, however, make acquisitions tougher as REITs need to find suitable assets with a net property income (NPI) yield higher than their cost of borrowing.
Despite this difficulty, several REITs have announced acquisitions of late.
Mapletree Logistics Trust (SGX: M44U) announced the acquisition of eight properties in three countries while CapitaLand Ascendas REIT (SGX: A17U) recently purchased The Shugart, a high-specification research and development facility.
Now, Mapletree Industrial Trust (SGX: ME8U), or MIT, has joined in with its first acquisition in two years – that of a data centre in Osaka, Japan.
Here are five things that investors need to know about this transaction.
1. Growing its portfolio further...