Real Estate Investment Trusts (REITs) are naturally popular with many Singapore investors given that property investment is big part of our economy. In Singapore, there are a total of 35 REITs, six stapled trusts and two property trusts with a combined market capitalisation of over $100 billion.
As highlighted in a recent SGX market update report, 4 of the 30 constituents of the benchmark Straits Times Index (STI) comprise REITs, and account for about 8% of total index weight. More interestingly, the entire STI Reserve List currently consists of REITs.
For 2019 thus far, REITs have performed well with the iEdge S-REIT Index generating a total return of 24.9%, with a small handful of REITs generating returns of more than 50% for its investors.
In this edition of 4 Stocks This Week, we look at some of the top performing REITs on the SGX for 2019.
Ascendas India Trust (SGX: CY6U)
Ascendas India Trust (AIT) is a property trust which owns seven IT parks and six modern warehouses across Bangalore, Chennai, Hyderabad, Pune and Mumbai.
Since the start of 2019, total returns to date for Ascenda India is at 52.7%. Over a 5-year period, the total return for the stock is at 155.4%.
Earlier this week, it was announced that Ascendas India Trust (a-iTrust) is launching a private placement of at least 66.3 million units at an issue price of between S$1.465 and S$1.508 to raise gross proceeds of at least S$100 million to fund a potential investment in a business park in Bangalore. The issue price represents a discount of between 2.9 and 5.7 per cent to the volume-weighted average price of S$1.5538 per unit for all trades done on Nov 18 – the full market day before the placement agreement was signed.
The stock is currently trading at price-to-earning (P/E) ratio of 7.6 with a dividend yield of 5.4%.
Keppel DC REIT (SGX: AJBU)
Listed on 12 December 2014, Keppel DC REIT is the first pure-play data centre REIT listed in Asia on the SGX. Keppel DC REIT’s investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets.
Returns for the stock for 2019 thus far is 51.6%. Over a 3-year period, total returns are at 84.8%.The stock is currently trading at P/E ratio of 17.8 with a dividend yield of 3.3%. Since the start of year, stock price has increased from $1.36 to $2.01.
Ascendas Hospitality Trust (SGX: Q1P)
Ascendas Hospitality Trust owns 14 properties in 4 countries, namely Singapore, Japan, South Korea and Australia. Ascendas HTrust owns 6 properties in Australia, 5 in Japan, 2 in South Korea and Park Hotel Clarke Quay in Singapore.
Do note that the proposed merger between Ascendas Hospitality Trust and Ascott Residence Trust has been approved by stapled security holders of Ascendas Hospitality Trust on 21 Oct 2019. Subject to the court’s sanction, the last trading day for the Ascendas Hospitality Trust is expected to be on 16 Dec 2019, with delisting scheduled for 3 Jan 2020.
If you have been fortunate to invest in the stock at the start of the year, you would have seen the stock price increase from $0.77 to the current level of $1.08 as of today. In total, return to date is at 50%.
Mapletree Commercial Trust (SGX: N2IU)
With a portfolio of five prime properties, including VivoCity, Mapletree Business City I, PSA Building, Mapletree Anson and Bank of America Merrill Lynch HarbourFront, Mapletree Commercial Trust has a market capitalisation of about $7 billion.
Since the start of 2019, Mapletree Commercial has earn a total return of 44.9%. Over the past 5 years, total returns are at 115.5%.
The stock is currently trading at a p/e ratio of 7.6 with a dividend yield of 3.2%.
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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.