THE iEdge S-Reit Index declined 5.6 per cent on a total return basis in the year to date, with declines also recorded in the FTSE EPRA Nareit Index series which track global Reits. Reits started the year slightly weaker after the Federal Open Market Committee (FOMC) announced on Jan 31 that it would maintain its policy rate in the range of 5.25 to 5.5 per cent.
Expectations of a rate cut at the March 2024 FOMC on the CME Fed Watch Tool also fell from an earlier 90 per cent to the current 10 per cent. This has coincided with S-Reits booking more than S$200 million in net institutional selling (note that net buy/sell amount is derived by subtracting total sell amount from total buy amount) in the first six weeks of 2024, with net flows revealing that institutions became more uncertain about the timing of the rate cut. (see Amendment note)
On the contrary, retail investors have been active participants in the sector, recording over S$280 million in net buying activity in the year to date through to Feb 15.
The 10 S-Reits which recorded largest net retail inflows in the year to date were Mapletree Logistics Trust : M44U 0%, Keppel DC Reit : AJBU 0%, CapitaLand Ascendas Reit : A17U 0%, Mapletree Pan Asia Commercial Trust : N2IU 0%, CapitaLand China Trust : AU8U 0%, CapitaLand Ascott Trust : HMN 0%, CapitaLand Integrated Commercial Trust : C38U 0%, Frasers Logistics & Commercial Trust : BUOU 0%, CDL Hospitality Trusts : J85 0%, and ParkwayLife Reit : C2PU 0%. These 10 S-Reits contribute S$250 million in net retail inflows, or nearly 90 per cent of the combined net retail inflows in the year to date.
Mapletree Logistics Trust (MLT) announced that its gross revenue for Q3 FY23/24 increased by 2.1 per cent year on year to S$184.0 million, and net property income (NPI) rose 1.5 per cent to S$159.5 million. Growth was largely driven by higher contribution from Singapore properties and new overseas acquisitions completed in Q1 FY23/24 but was partly offset by weaker performance in China and depreciation of various currencies.
Distribution per unit (DPU) grew 1.2 per cent to 2.253 Singapore cents. During the quarter, MLT deepened its presence in India with the proposed acquisition of a modern Grade A warehouse in Farukhnagar, Delhi NCR, and completed divestments of two assets in Malaysia and Singapore. In tackling currency volatility, MLT has hedged approximately 80 per cent of its income stream for the next 12 months in Singapore dollars and around 83 per cent of total debt hedged at fixed rates.
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CapitaLand Ascendas Reit (CLAR) reported that its gross revenue for FY2023 rose by 9.4 per cent year on year to S$1.48 billion, and NPI rose 5.6 per cent to cross the S$1 billion mark for the first time since its IPO in 2002. Growth was driven by acquisitions completed in the past year as well as higher occupancy and positive rental reversions achieved in its Singapore portfolio. CLAR’s overall FY2023 DPU declined 4.0 per cent to 15.160 Singapore cents on lower distribution, mainly due to higher interest expenses. Despite higher interest rates, CLAR has maintained a leverage ratio of 37.9 per cent, with 79.1 per cent at fixed rates.
Looking at stock performance on a year-to-date basis, ParkwayLife Reit (PLife Reit) was the best performing of the 10 S-Reits that topped net retail inflows, generating 2.7 per cent in total returns.
PLife Reit announced that its gross revenue for FY2023 increased 13.5 per cent year on year to S$147.5 million, and NPI rose 14.1 per cent to S$139.1 million. Growth was driven by contributions from properties acquired in the past two years, higher rent from Singapore hospitals under the new master lease agreements and partially offset by a weaker Japanese yen. PLife Reit’s FY2023 DPU grew 2.7 per cent to 14.77 Singapore cents. During the year, PLife Reit acquired two new nursing homes in Osaka Prefecture and has enlarged its portfolio to 63 healthcare properties across Singapore, Japan and Malaysia. SGX RESEARCH
The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
Source: SGX Research S-Reits & Property Trusts Chartbook.
Amendment note: The writer had earlier used “buying” when it should be “selling”.
FAQs
The 10 S-Reits which recorded largest net retail inflows in the year to date were Mapletree Logistics Trust, Keppel DC Reit, CapitaLand Ascendas Reit, Mapletree Pan Asia Commercial Trust, CapitaLand China Trust, CapitaLand Ascott Trust, CapitaLand Integrated Commercial Trust, Frasers Logistics & Commercial Trust, CDL ...
What is retail REITs? ›
Retail REITs are a type of REIT that owns and manages retail properties in central business districts and upmarket areas. It leases the retail space to tenants looking to set up shopping malls, grocery stores, boutiques, etc.
Is it a good time to buy REITs in Singapore? ›
With rate cuts on the horizon, we believe investors have an opportunity to continue investing into S-Reits as the high estimated dividend yield of close to 7 per cent in 2024 will look increasingly attractive.
What is the performance of Singapore REITs? ›
Total Singapore REIT Market Capitalisation decreased by 8.87% to S$87.49 Billion.
What is the return of REITs in Singapore? ›
There are 42 REITs and property trusts in Singapore.
What is the largest retail REIT? ›
The largest retail REIT, Property Simon, saw its market cap rise from 38.6 billion U.S. dollars to 46.6 billion U.S. dollars between December 2022 and December 2023. Despite the REIT sector compressing in 2022, the three year-returns of most REITs remained positive.
Are REITs still a good investment? ›
Real estate investment trusts, or REITs, allow investors to add a diversified collection of real estate to their portfolio through a single entity. Real estate investments can be an excellent way to earn returns, generate cash flow, hedge against inflation and diversify an investment portfolio.
How long should I hold a REIT? ›
“Both public and non-public REIT investments should be considered long-term, and that could mean different things to different folks, but in general, investors who typically invest in REITs look to hold them for a minimum of three years, and some of them could hold them for 10+ years,” Jhangiani explained.
Will REITs recover in 2024? ›
But despite that, most REITs have kept growing their dividend. Most of them hiked in 2022, 2023, and will hike again in 2024. This is the ultimate proof that REITs are doing better than what the market appears to believe.
Why is REIT going down? ›
The overall business performance of the S-REIT sector has been lacklustre and some segments of the industry have not been able to recover to pre-COVID levels, either due to a change in business dynamics or due to an inflationary environment. Office REITs have faced challenges due to the new work-from-home (WFH) trends.
Largest Real-Estate-Investment-Trusts by market cap
| # | Name | M. Cap |
|---|
| 1 | Prologis 1PLD | $94.48 B |
| 2 | American Tower 2AMT | $80.11 B |
| 3 | Equinix 3EQIX | $67.48 B |
| 4 | Welltower 4WELL | $56.31 B |
57 more rows41 S-REITs and property trusts with a total market capitalisation of approximately S$100 billion (as at 31 January 2024). Singapore has the largest REIT market in Asia (ex-Japan) and is increasingly becoming a global REIT hub.
Do REITs beat the market? ›
REITs are also attractive thanks to their market-beating returns. During the past 25 years, REITs have delivered an 11.4% annual return, crushing the S&P 500's 7.6% annualized total return in the same period.
Will REITs bounce back? ›
In fact, REIT total returns bounced back with impressive performance in the last quarter of 2023. Based on historical experience, the convergence of the wide valuation gap between public and private real estate will likely ensure continued REIT outperformance into 2024.
Is it time to buy Singapore REITs? ›
Valuation looks attractive
The recent decline in S-REITs has resulted in more attractive valuations. With the price-to-book ratio at 0.85X, near a decade low, it signals a potential value-buying opportunity for investors.
What is a good return for REITs? ›
Which REIT subgroups have done the best at outperforming stocks?
| REIT SUBGROUP | AVERAGE ANNUAL TOTAL RETURN (1994-2023) |
|---|
| Retail | 11.2% |
| Office | 10.1% |
| Lodging/Resorts | 9.0% |
| Diversified | 7.9% |
5 more rowsMar 4, 2024
SmartCentres Real Estate Investment Trust is a Canadian real estate investment trust, based in Vaughan, Ontario. It specializes in retail real estate, especially power centres. Almost all of its malls have Walmart as a tenant; SmartCentre's logo features a family of penguins with shopping bags.
What is retail real estate investing? ›
As the name suggests, a retail lease applies to those spaces or premises intended exclusively for retail, i.e. selling goods or services. For example, the premises used for a clothing store is leased out on a retail lease.
Can retail investors invest in REIT? ›
Investors can now start investing in both residential and commercial properties through SM REITs with a minimum cheque size of Rs 10 lakh.
