On the back of heightened volatility induced by COVID-19, REITs in Singapore and globally have witnessed large price fluctuations while dipping into a bear market. The last time DollarsAndSense published our REITs Report Card, the markets hadn’t been drastically impacted yet – registering a 2.4% increase for the year-to-date (YTD), as at 8 March 2020.
Since then, Singapore listed REITs have plunged more than 34%, and even after staging a partial recovery, is down over 16% in YTD 2020.
Chart: iEdge S-REIT Index
Source: SGX
With Covid-19 leading to large scale lockdowns in many major cities globally, REITs have understandably suffered as large majority of its tenants cannot operate business as usual.
Compared to Singapore’s benchmark Straits Times Index (STI), which is down over 22% in YTD 2020, REITs have performed slightly better so far. Singapore-listed REITs have also fared better than its global peers, represented by the S&P Global REIT (USD) index, which is down 21% in YTD 2020.
Read Also: Investing In Property VS REITs: Which Is Better?
New Measures By The Singapore Government To Help REITs
On 16 April 2020 the Singapore government announced that it will provide REITs with greater flexibility in managing their cash flows amid the challenging economy, with two measures.
#1 Extension Of Permissible Period For Distribution Of Taxable Income
In order to qualify for tax transparency, REITs need to distribute at least 90% of their taxable income within 3 months after the end of their Financial Year (FY). For FY2020, this has been extended from 3 months to 12 months. This will only be applicable for FY2020.
This measure allows REITs more flexibility in managing their cash flows, and has already been utilised by REITs in Singapore a portion of its distributable income so as to even out its payouts during the year. With this, REITs will also have a larger cash reserve to use for its operations to mitigate any potential need to raise new funds.
#2 Higher Leverage Limit And Deferral Of Interest Coverage Requirement
Singapore-listed REITs also need to comply with a 45% leverage limit. This will be increased to 50% to provide REITs greater flexibility in managing capital structure.
A new minimum interest coverage ratio (ICR) requirement will also be deferred to 2022. Last year, the Monetary Authority of Singapore (MAS) proposed to require Singapore REITs to have a minimum ICR of 2.5 before they are allowed to increase their leverage limit from 45% to 50%.
These measures will help REITs service their debt obligations without raising new equity capital as well as continue to raise debt capital if necessary.
How Individual S-REITs Have Performed In 2nd Quarter 2020
| No. | All REITs, Stapled Securities And Other Trusts, And ETFs (Property Locations) |
Price (SGD) | Distribution Yield | Return In YTD 2019 |
| REITs and Stapled Securities | ||||
| Commercial/Office REITs+ | ||||
| 1 | CapitaLand Commercial Trust (Singapore, Malaysia) |
$1.51 | 5.6% | -22.7% |
| 2 | Cromwell European REIT (EUR) (Denmark, France, Germany, Italy, the Netherlands, Finland and Poland) |
€0.395 | 10.3% | -24.1% |
| 3 | Elite Commercial REIT | £0.65 | N.A. | N.A. |
| 4 | IREIT Global (Germany) |
$0.68 | 8.3% | -13.4% |
| 5 | Keppel REIT (Singapore, Australia and South Korea) |
$1.00 | 5.6% | -17.4% |
| 6 | Keppel Pacific Oak US REIT (USD) (USA) |
US$0.60 | 10.0% | -22.0% |
| 7 | Manulife US REIT (USD) (USA) |
US$0.70 | 10.8% | -29.0% |
| 8 | OUE Commercial REIT (Singapore and China) |
$0.81 | 9.3% | -28.2% |
| 9 | Prime US REIT (USA) |
US$0.705 | 5.8% | -24.1% |
| 10 | Suntec REIT (Singapore and Australia) |
$1.38 | 7.0% | -23.1% |
| Retail REITs+ | ||||
| 11 | BHG Retail REIT (China) |
$0.635 | 6.1% | -4.5% |
| 12 | CapitaLand Mall Trust (Singapore and China) |
$1.74 | 6.7% | -28.1% |
| 13 | CapitaLand Retail China Trust (China) |
$1.30 | 7.6% | -17.3% |
| 14 | Frasers Centrepoint Trust (Singapore and Malaysia) |
$1.99 | 4.4% | -27.9% |
| 15 | Lendlease Global Commercial REIT (Singapore and Italy) |
$0.56 | 2.3% | -38.9% |
| 16 | Lippo Malls Indonesia Trust (Indonesia) |
$0.132 | 13.6% | -39.4% |
| 17 | Mapletree Commercial Trust (Singapore) |
$1.80 | 3.4% | -23.7% |
| 18 | Mapletree North Asia Commercial Trust (Hong Kong, China and Japan) |
$0.87 | 4.4% | -33.2% |
| 19 | Sasseur REIT (China) |
$0.73 | 8.9% | -15.8% |
| 20 | SPH REIT (Singapore and Australia) |
$0.785 | 5.8% | -26.3% |
| 21 | Starhill Global REIT (Singapore, Australia, Malaysia, China and Japan) |
$0.46 | 9.7% | -35.5% |
| 22 | United Hampshire US REIT | US$0.61 | N.A. | N.A |
| Industrial REITs+ | ||||
| 23 | AIMS APAC REIT (Singapore and Australia) |
$1.18 | 8.7% | -16.0% |
| 24 | Ascendas REIT (Singapore, Australia and the UK) |
$2.90 | 5.5% | -1.3% |
| 25 | ARA Logos Logistics Trust (Singapore and Australia [Formerly Cache Logistics Trust] |
$0.495 | 10.1% | -28.0% |
| 26 | EC World REIT (China) |
$0.675 | 9.0% | -7.1% |
| 27 | ESR-REIT (Singapore) |
$0.355 | 7.2% | -31.0% |
| 28 | Frasers Logistics & Commercial Trust (Singapore, Australia, Germany the Netherlands) [Formerly Frasers Logistics & Industrial Trust] |
$1.08 | 6.5% | -9.5% |
| 29 | Keppel DC REIT (Singapore, Malaysia, Australia, Germany, the Netherlands, Ireland, the UK and Italy) |
$2.35 | 3.0% | 14.0% |
| 30 | Mapletree Industrial Trust (Singapore and the USA) |
$2.45 | 5.0% | -3.6% |
| 31 | Mapletree Logistics Trust (Singapore, Malaysia, China, Japan, Hong Kong, Australia, South Korea and Vietnam) |
$1.82 | 4.4% | 6.6% |
| 32 | Sabana REIT (Singapore) |
$0.32 | 9.1% | -29.3% |
| 33 | Soilbuild Business Space REIT (Singapore and Australia) |
$0.37 | 10.5% | -25.9% |
| Hospitality REITs+ | ||||
| 34 | ARA US Hospitality Trust (USA) |
US$0.375 | 11.2% | -54.6% |
| 35 | Ascott Residence Trust (Singapore, Malaysia, Australia, Japan, China, the USA, Vietnam, Indonesia, the Philippines, Germany, France, Spain and Belgium) |
$0.835 | 9.1% | -35.2% |
| 36 | CDL Hospitality Trust (Singapore, Australia, the Maldives, New Zealand, Japan, the UK, Germany and Italy) |
$0.895 | 10.1% | -43.0% |
| 37 | Eagle Hospitality Trust (USA) |
N.A. | N.A. | -74.9% |
| 38 | Far East Hospitality Trust (Singapore) |
$0.455 | 8.4% | -37.6% |
| 39 | Frasers Hospitality Trust (Singapore, the UK, Japan, Australia and Germany) |
$0.43 | 5.8% | -39.0% |
| Healthcare REITs+ | ||||
| 40 | First REIT (Indonesia, Singapore and South Korea) |
$0.80 | 10.4% | -16.0% |
| 41 | Parkway Life REIT (Singapore, Malaysia and Japan) |
$3.17 | 4.2% | -2.7% |
| Other Property Trusts++ | ||||
| 42 | Accordia Golf Trust (Japan) |
$0.58 | 9.1% | -13.4% |
| 43 | Ascendas India Trust (India) |
$1.32 | 7.2% | -14.4% |
| 44 | Dasin Retail Trust (China) |
$0.84 | 8.5% | 2.5% |
| 45 | Hutchison Port Holdings (Hong Kong and China) |
US$0.11 | 11.3% | -31.5% |
| 46 | Keppel Infrastructure Trust (Singapore, Australia and New Zealand) |
$0.51 | 7.3% | -3.8% |
| REIT ETFs+++ | ||||
| 47 | Lion-Phillip S-REIT ETF | $0.98 | 1.3% | -18.0% |
| 48 | NikkoAM-Straits Trading Asia Ex Japan REIT ETF | $1.044 | 3.6% | -16.8% |
| 49 | Phillip SGX APAC Dividend Leaders REIT ETF | $1.117 | 5.9% | -24.3% |
Footnotes For Clarity
+ Based on PhillipCapital Research (as of 19 May 2020)
++ From Individual REIT results announcement
+++ From SGX / Bloomberg (23 May)
5 Best Performing Singapore REITs In YTD 2020
#1 Keppel DC REIT (14.0%)
#2 Mapletree Logistics Trust (6.6%)
#3 Dasin Retail Trust (2.5%)
#4 Ascendas REIT (-1.3%)
#5 Parkway Life REIT (-2.7%)
The best performing REIT in YTD 2020 is Keppel DC REIT, delivering a total return of 14.0%. Keppel DC REIT currently pays a 3.0% distribution yield as well, making it one of the lowest yielding REITs. As we can see, Covid-19 effect has translated into only three REITs with positive returns to show for in the first half of 2020.
5 Highest Yielding REITs In YTD 2020
#1 Lippo Malls Indonesia Trust (13.6%)
#2 Hutchison Port Holdings (11.3%)
#3 ARA Hospitality Trust (11.2%)
#4 Manulife US REIT (10.8%)
#5 Soilbuild Business Space REIT (10.5%)
The best yielding REIT is currently Lippo Malls Indonesia Trust. However, coupled with its high yields, these REITs are also typically the biggest losers in terms of total returns in YTD 2020, with Lippo Malls Indonesia Trust returning -39.4%. Similarly, in the YTD 2020, Hutchison Port Holdings returned -31.5%, ARA Hospitality Trust returned -54.6%, Manulife US REIT deliver -29.0% and Soildbuild Business Space REIT delivered -25.9%.
5 Worst Performing Singapore REITs in YTD 2020
#1 Eagle Hospitality trust (-74.9%)
#2 ARA Hospitality Trust (-54.6%)
#3 CDL Hospitality Trust (-43.0%)
#4 Lippo Malls Indonesia Trust (-39.4%)
#5 Frasers Hospitality Trust (-39.0%)
Four of the top five worst performing REITs are hospitality focused, which says a lot about which sector has been the hardest hit by Covid-19. The worst performing REIT Eagle Hospitality Trust has been suspended from trading, and has gone on to post a loss for its latest quarter.
Read Also: Complete Guide To Start Your REITs Investing Journey In Singapore
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