With more than 40 real estate investment trusts (REITs) and property trusts, the Singapore Exchange (SGX) is a haven for those who are looking to invest in real estates. This makes sense as many Singapore investors have a penchant for investing in properties, both locally and overseas.
REITs are a great way to get started on investing in properties.
Unlike the purchase of physical properties, a REIT investor only needs to make an outlay of a few thousand dollars, as opposed to hundreds of thousands of dollars. In addition, investors will enjoy greater diversification as each REIT they invest in already own multiple properties. Also, investors do not have to worry about the hassle of managing the properties since the REITs manager will already be managing the assets for them.
REITs themselves are always on the lookout to add quality properties to their portfolio. Doing so allows them to grow their assets under management and to increase their dividend yield to investors.
In this week edition of 4 Stocks This Week, we take a closer look at some REITs and property trusts which have been acquiring new properties over the past month.
# 1 Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust is a Singapore-based retail real estate investment trust (REIT). Essentially, this means it owns multiple shopping malls within Singapore such as Causeway Point, Northpoint, Anchorpoint, YewTee Point, Bedok Point and Changi City Point.
Earlier in May, the company announced its intention to acquire a one-third interest in Waterway Point for a sum of S$433.3 million. This will be partly funded by the proceed brought in by a recent fundraising exercise that the company has.
Since the start of the year, the company has generated a return of about 14.0% with a dividend yield of about 5.0%. It’s currently trading at a price-to-book value (P/B) of 1.16 and a price-to-earning (P/E) ratio of 13.47.
# 2 Sasseur REITs (SGX: CRPU)
Sasseur REIT is the first outlet mall REIT to be listed in Singapore, comprising of 4 retail outlet malls located in Chongqing, Bishan, Hefei and Kunming. Since being listed on the SGX in March 2018 with an IPO price of $0.80, the stock has seen its price stay relatively flat. Currently it’s trading at $0.775.
Sasseur has recently announced the completion of its first post-IPO acquisition, which is to acquire additional shop units with existing tenancies at the block of its Hefei outlet, for about RMB98.3 million (S$19.56 million). This acquisition will be fully funded by the company’s existing cash holding and is expected to increase the REIT’s Distribution Per Unit (DPU) from 5.128 cents to 5.179 cents.
# 3 Manulife US REIT (SGX: BTOU)
Manulife US Real Estate Investment Trust is a real estate investment trust (REIT). It focuses on investing, directly or indirectly, in a portfolio of income-producing office real estate in markets in the United States, as well as real estate-related assets. Its portfolio consists of three office properties in the United States, with a net lettable area of approximately 1,783,080 square feet.
Earlier in May, the company announced it had completed the acquisition of property in Fairfax, Virginia, Washington DC at a purchase price of US$122.0 million. This two-tower, Class A building, is located about 30 minutes away from Washington DC and with an occupancy rate of 98.7%, is expected to increase the company’s DPU by 3.3% to 5.76 US Cents.
Manulife is currently trading at a P/B value of 1.05 and a P/E of 15.56. Since the start of the year, the company has generated a return of 18.5% with a dividend yield of 7.1%.
# 4 EC World REIT (SGX: BWCU)
Listed in 2016, EC World REIT has a portfolio of properties mostly situated in one of the largest e-commerce clusters in Hangzhou, China. The properties are used in e-commerce, supply chain management and logistics.
In May, EC World REIT announced the proposed acquisition and master lease agreement of a Fuzhou an integrated e-commerce logistic asset, which comprises of a 3-storey warehouse building and two 14-storey office building. The current occupancy for the site is 100%. The property purchase price is for RMB 1,112.5 million (S$223.6 million).
With this additional asset, the DPU for the share is expected to increase by about 1.6% to 6.278 Singapore cent.
The company is currently trading at P/B value of 0.882 and a P/E of 13.331.
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.
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