Trusts to yield $5bn but falls predicted Maxim Asset Management managing director Winston Sammut said distribution had been "pretty good" but still historically low for the listed property trust sector during 2013. INVESTORS will reap $5.17 billion in distribution payments from listed property trusts this financial year, but analysts warn that returns to shareholders will fall next year. The real estate investment trust sector is set to deliver a yield of 5.5 per cent for financial year 2013, with Stockland the star performer at just below 7 per cent, based on the most recent figures from analysts at Goldman Sachs. "On a yield basis, Stockland, CFS Retail, Charter Hall Retail and Westfield Retail screen highest, while more active stocks among our coverage, including Goodman, Westfield Group and Lend Lease, screen lowest," Goldman Sachs analysts Simon Wheatley and Andrew MacFarlane wrote in a note to clients. With the sector valued at $94bn, the yield translates to a $5.17bn gain for investors. Coupled with a 21.02 per cent gain in share prices over the year, even despite recent market routs, REIT investors have come out on top in 2013. But Goldman Sachs has warned that yields will fall to 5.3 per cent next year while share prices are expected to dip 5.3 per cent across the REIT board, leaving total returns at zero for fiscal year 2014. That figure does not include Lend Lease which, while a property trust, is often coupled with other construction companies due to its presence in the sector. "The value opportunity has switched from stapled REITs to passive REITs, which now trade below net tangible asset basis," Mr Wheatley and Mr MacFarlane wrote. For the current year ending June 30, Shaw Stockbroking analyst Scott Marshall said that there had been some modest increases in sector yields overall. "Some of the trusts that have been able to generate growth by acquisition or conservative funding, such as BWP and even Goodman Group, have managed to promise above sector growth in yields for this reporting season and there's a few new listings as well that are outperforming," Mr Marshall said. However, most of the trusts are reporting growth in yield of between zero and 3 per cent. Maxim Asset Management managing director Winston Sammut said distribution had been "pretty good" but still historically low for the sector during 2013. Beyond the larger trusts, Mr Sammut said debutant distribution payer 360 Capital, which listed on the exchange only late last year, performed well, producing a distribution yield of 8.7 per cent for investors, while Folkestone-managed Australian Social Infrastructure Trust and Australian Education Trust delivered investors yields of 8.8 per cent and 8 per cent, respectively. Ardent Leisure also had a 7.2 per cent distribution yield, he said. When it came to the larger trusts, Mr Sammut said he was most impressed with Dexus, which announced "they're increasing their distribution payout ratio to the upper range of 80 per cent, which is a positive sign," he said. A large function of that is that company debt has been reduced and interest rates have come down so that gives trusts the ability to move to the upper end of their ranges and boosts their ability to offer an attractive income stream to investors. He said he expected other REITs would also lift the amount of profits paid to investors through distributions and also some minor adjustments to the percentage range upon which distributions would be made. "So if a trust's upper range is 70 per cent, then it might look to lift the upper range to 75 per cent, which again provides opportunity for higher payouts," he said. Much like Goldman Sachs, Mr Sammut said that he did not expect share prices to have another significant run in the year ahead. But he did expect distributions to hold up.