In the 12 weeks between 9 June to 28 August, the 10 Singapore REITs that received the highest net institutional inflows also delivered an average return of 6%. In comparison, the remaining Singapore REITs delivered an average return of -9% in the same time.
This highlights the effect of “smart money” – commonly associated with institutional investors, rather than retail investors – being invested.
For this week’s 4 Stocks This Week, we look at the top four Singapore REITs which received the highest net institutional inflows, proportionate to their market capitalisation.
Sabana REIT (SGX: M1GU)
With a market capitalisation of $390 million, Sabana REIT saw the S-REIT sector’s highest proportionate net institutional inflows since 9 June 2020. Between 9 June to 28 August, Sabana REIT received a net institutional inflow worth 1.0% of its market capitalisation – or approximately $3.9 million.
Part of the reason could be tied to its Manager stating that its proposed merger with ESR REIT offers opportunities for re-rating and reducing its net asset value discount in the long-term, when it becomes part of a larger and more liquid REIT.
In the 12-week period from 9 June to 28 August 2020, Sabana REIT delivered a return of negative 1%. Overall, in the year-to-date, Sabana REIT has declined 17%.
Frasers Logistics & Commercial Trust (SGX: BUOU)
FLCT recently completed the merger of Frasers Logistics & Industrial Trust (FLT) and Frasers Commercial Trust, forming the 8th largest Singapore REIT, compared to being the 16th and 24th largest Singapore REIT respectively.
The enlarged FLCT comprises logistics properties in Australia and Europe, which remain one of the beneficiary sectors during COVID-19, as well as the commercial properties in Singapore.
Between 9 June 2020 to 28 August 2020, FLCT received a net institutional inflow worth 0.6% of its market capitalisation of $4.6 billion – translating to approximately $28 million. During this 12-week period, it also saw its share price surge 14%.
Ascendas REIT (SGX: A17U)
AREIT received the 3rd highest proportionate net institutional inflow, of 0.5% of its market capitalisation, in the 12-week period from 9 June to 28 August 2020. Being the largest REIT in Singapore, with a market capitalisation of close to $12 billion, this also translated the highest institutional inflow in terms of value, worth nearly $60 million.
Similar to FLCT, AREIT’s properties are predominantly within the logistics sector, which is one of the few sectors that have benefited from the acceleration of e-commerce and automation trends as a result of COVID-19.
While AREIT gained 3% during this period, from 9 June to 28 August 2020, it has achieved a year-to-date return of 15% in 2020.
Mapletree Logistics Trust (SGX: M44U)
Rounding up the top four Singapore REITs with the highest proportionate net institutional inflows between 9 June to 28 August 2020, MLT received 0.4% of its market capitalisation. This was worth over $31 million.
Unsurprisingly, like the three other REITs mentioned before it, MLT also owns properties in the logistics sector.
Between 9 June to 28 August 2020, MLT delivered a return of 8%. Looking at the longer year-to-date performance, MLT has achieved 22% return.
Logistics Sector Standing Out During The COVID-19 Downturn
All four Singapore REITs with the highest proportionate net institutional inflows were in the logistics sector – highlighting that “smart money” has gone into the sector and perhaps showcasing industrial properties’ expected strength in an uncertain economic landscape.
In our recent 3rd quarter Singapore REITs report card, we also highlighted that the top five best performing REITs in the year-to-date were 1) Keppel DC REIT (46.7%); 2) Mapletree Industrial Trust (29.6%); MLT (26.0%); AREIT (23.0%); and FLCT (13.1%). This is accurate as at 18 August.
Three of the four REITs with the highest proportionate institutional inflows are also part of the top five best performing REITs in the year-to-date. Furthermore, the two other Singapore REITs that are part of the top five best performing REITs in to-date 2020 are also in the logistics/industrial sector.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.