We look at specific themes and/or groups of companies on the Singapore Exchange (SGX) in our 4 Stocks This Week every week. This week, we look at how investors in Singapore can get US REIT exposure with four REITs and business trusts that are listed here.
Since Manulife US REIT listed in Singapore in May 2016, offering the first pure-play US REIT exposure for investors here, there have been two other such listings – Keppel-KBS US REIT in November 2017 and, more recently, ARA US Hospitality REIT, in May 2019.
These REIT and business trust listings coincide with the positive economic growth and outlook in the US in the past few years. Between 2010 and 2017, US real GDP grew at a compounded annual growth rate (CAGR) of 2.2%, and further accelerated to 2.9% in 2018. US real GDP is also expected to continue growing at a CAGR of 2.0% from 2019 to 2023.
Here’s a closer look at the REITs.
Keppel-KBS US REIT (SGX: CMOU)
Kep-KBS REIT is a commercial REIT that was listed on the SGX on 9 November 2017. The REIT currently has 13 freehold office properties in seven cities in the US, with 4.3 million sq ft of net lettable area.
These cities are listed as “key growth cities” on the Kep-KBS REIT website, and comprise Seattle and Sacramento in the West Coast, Denver, Austin and Houston in the Central region, and Atlanta and Orlando in the East Coast. Its property portfolio is valued at close to US$1.1 billion.
In its latest results, from January to March 2019, it delivered a 24.2% increase in revenue to US$29.4 million. This was primarily due to its acquisitions of its Westpark Portfolio and Maitland Promenade I properties in November 2018 and January 2019 respectively.
In terms of its distribution per unit (DPU), this stayed at a constant US$0.015. In the past 1-year period, its unit price has declined close to 10.7%, to US$0.75.
Manulife US REIT (SGX: BTOU)
Manulife US REIT was listed on the SGX on 20 May 2016. Its portfolio of properties comprises seven office properties with a net lettable area of 3.7 million sq ft in “prime areas of key US cities”.
Its properties are located in California, Georgia, New Jersey and Washington D.C, and are valued at US$1.8 billion.
In its latest results, from January to March 2019, it delivered a 28.5% increase in revenue to US$40.0 million. This was largely due to its acquisition of two properties in Washington D.C. and Georgia.
Its distribution per unit (DPU) rose 0.7% to US$0.0151 on the back of its acquisitions. In the past 1-year period, its unit price has declined close to 9.7% to US$0.84.
ARA US Hospitality REIT (SGX: XZL)
ARA US HTrust is the latest US pure-play business trust, and first US pure-play hospitality trust, to be listed on the SGX on 9 May 2019. At an IPO price of US$0.88, and a forecasted distribution per stapled security of 8%, the business trust was 1.1 times oversubscribed.
The trust manages a portfolio of 38 hotel, consisting of 27 Hyatt Place hotels and 11 Hyatt House hotels located across 21 states in the US. Its properties are located in California, Idaho, New Mexico, Colorado, Nebraska, Oklahoma, Illinois, Tennessee, Alabama, Kentucky, Ohio, Michigan, Georgia, Florida, Pennsylvania, Virginia, North Carolina and New York. These properties are valued at close to US$719.5 million.
Its share price ended unchanged, at its IPO price of US$0.88.
Ascott Residence Trust (SGX: A68U)
While Ascott REIT is not a US pure-play on the list, it has 16% of its overall portfolio of properties located in the US. Its total hospitality portfolio comprises 73 properties in 37 cities across 14 countries.
Valued at $5.3 billion, its property portfolio is located in the US, the UK, Belgium, Germany France, Spain, China, Japan, Vietnam, the Philippines, Indonesia, Malaysia, Singapore and Australia.
In its latest results, from January to March 2019, Ascott REIT reported a 3% increase in revenue to $115.9 million. This was mainly due to stability in the performance of its properties, and an increase in contribution from the Singapore, UK and Philippines properties.
Its distribution per unit was $0.0145, representing an increase of 7.4%. In the past 1-year period, its unit price has also performed well, increasing 7.1% to $1.20.
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