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S-REIT Report Card: Here’s How Singapore REITs Performed In Third Quarter 2018

Singapore REITs just posted their 3rd quarter results, here’s how they have done in 2018 so far.

Against the backdrop of a rising interest rate environment, REITs seem to be one of the obvious losers. This is because REITs are asset-heavy investments that require high levels of leverage, borrowing substantial amounts of money to purchase properties that they subsequently rent out.

Read Also: Increasing Interest Rates In 2018: Here Are 4 Ways Singaporeans Will Be Affected

In Singapore, there are currently 39 listed REITs and a further nine business trusts (of which six are property related). On average, they have a debt to asset ratio of just under 35%. With rising interest rates, REITs will have to fork out more in interest payment, potentially reducing the distributions they can pay to investors.

How REITs Have Performed In YTD 2018

To gauge the performance of REITs in 2018, we can look to two indexes in Singapore – the S-REIT Index, an index of all REITs listed in Singapore, and the S-REIT 20 Index, an index of the top 20 REITs listed in Singapore respectively.

In the year-to-date (YTD), the S-REIT Index has declined close to 9.5%, while the S-REIT 20 Index has declined close to 8.8%, depicted in the two charts below. What this tells us is that while all REITs likely declined in prices in YTD 2018, the 20 largest and most liquid REITs, performed better than others.

Read Also: [2018 Edition] Complete Guide To Start Your REITs Investing Journey In Singapore

Do note that prices do not represent the total return of REITs as they typically pay out good distributions to investors.

Source: SGX

Source: SGX

Another way to look at how REITs have perform is to look at the REIT ETFs that are listed on the SGX. There are three REIT ETFs listed in Singapore, and here’s how they have done in 2018: 

REIT ETFs 1-Year Returns (Including distributions) Share price movement in YTD
Lion-Phillip S-REIT ETF* -0.30% -10.5%
NikkoAM-StraitsTrading Asia ex Japan REIT ETF** 0.74% -8.6%
Phillip SGX APAC Dividend Leaders REIT ETF** -0.74% -3.2%

* As at 30 September 2018

** As at 31 October 2018

Read Also: Investing In REIT ETFs Listed In Singapore: Here Are 5 Things You Need To Know

Below, we take a look at the individual performances of the REITs after releasing their third quarter results.

39 REITs, 6 Property-Related Stapled Securities And Trusts, And 3 REIT ETFs In Singapore

It is interesting to note that there have been no new REIT listings in Singapore in the second half of 2018 so far. Following the merger of Viva Industrial Trust and ESR REIT in October, there is one less REIT listed on SGX. The new entity will continue to be known as ESR REIT.

Below is how the individual REITs listed on SGX have performed in the YTD 2018.

No. All REITs, Stapled Securities And Other Trusts Industry (Country) Price On 26 Nov 2018 (SGD) Dividend Yield (%) + Return In YTD 2018 (%) +
Commercial/Office REITs
1 CapitaLand Commercial Trust Commercial (Singapore) 1.72 5.1 -7.2
2 Cromwell European REIT (EUR) Commercial (Denmark, France, Germany, Italy, and the Netherlands) EUR 0.44 8.6 -4.2
3 Frasers Commercial Trust Commercial (Singapore and Australia) 1.37 7.1 -1.7
4 IREIT Global Commercial (Germany) 0.74 7.9++ 4.2
5 Keppel REIT Commercial (Singapore and Australia) 1.13 5.1 -6.0
6 Keppel-KBS US REIT (USD) Commercial (USA) USD 0.56 10.3 -29.1
7 Manulife REIT (USD) Commercial (USA) USD 0.77 7.4 -8.4
8 OUE Commercial REIT Commercial (Singapore, China) 0.46 8.0 -24.3
9 Suntec REIT Commercial and Retail (Singapore) 1.76 5.7 -13.7
Retail REITs
10 BHG Retail REIT Retail (China) 0.66 8.4++ -4.2
11 CapitaLand Mall Trust Retail (Singapore) 2.21 5.1 8.7
12 CapitaRetail China Trust Retail (China) 1.36 7.7 -12.5
13 Fortune REIT (HKD) Retail and Commercial (Hong Kong) HKD 9.00 5.9 -3.3
14 Frasers Centrepoint Trust Retail (Singapore) 2.16 5.9 1.3
15 Lippo Malls Indonesia Trust Retail (Indonesia) 0.20 11.4 -40.3
16 Mapletree Commercial Trust Retail and Commercial (Singapore) 1.62 5.6 5.0
17 Mapletree North Asia Commercial Trust (Formerly known as Mapletree GCC Trust) Retail and Commercial (China and Hong Kong) 1.10 6.8 -4.5
18 Sasseur REIT Retail (China) 0.70 8.6 N.A.
19 SPH REIT Retail (Singapore) 0.99 5.7 0.1
20 Starhill Global REIT Retail and Commercial (Singapore, Australia, Malaysia and others) 0.67 7.2 -7.9
Industrial REITs
21 AIMS AMP Capital Industrial Reit Industrial (Singapore and Australia) 1.38 7.9 2.3
22 Ascendas Reit Industrial (Singapore, Australia and China) 2.55 6.3 0.3
23 Cache Logistics Trust Industrial (Singapore and Australia) 0.67 9.0 -16.0
24 EC World REIT Logistics (China) 0.69 8.8 -2.7
25 ESR-REIT Industrial (Singapore) 0.49 7.8 -3.7
26 Frasers Logistics & Industrial Trust Logistics and Industrial (Australia) 1.03 6.8 -3.3
27 Keppel DC REIT Data Centres (Diversified) 1.35 5.6 -0.7
28 Mapletree Industrial Trust Industrial (Singapore) 1.85 6.6 -3.8
29 Mapletree Logistics Trust Logistics and Industrial (Singapore, Japan, Hong Kong and others) 1.22 6.6 -3.3
30 Sabana REIT Industrial (Singapore) 0.40 7.7++ 5.4
31 Soilbuild Business Space REIT Industrial (Singapore) 0.59 9.0 -7.0
Hospitality REITs
32 Ascendas Hospitality Trust Hospitality (Australia, Japan, Singapore and China) 0.77 7.5 -2.9
33 Ascott Residence Trust Hospitality (Japan, China, Singapore and others) 1.08 6.4 -7.0
34 CDL Hospitality Trust Hospitality (Singapore, Australia, Maldives, New Zealand, Japan, United Kingdom) 1.47 6.2 -6.7
35 Far East Hospitality Trust Hospitality and Commercial (Singapore) 0.60 6.7 -10.0
36 Frasers Hospitality Trust Hospitality (Singapore, UK, Japan, Australia and Germany) 0.72 6.9 -3.3
37 OUE Hospitality Trust Hospitality (Singapore) 0.67 7.5 -16.7
Healthcare REITs
38 First REIT Healthcare (Indonesia) 0.98 7.9 -14.0
39 Parkway Life REIT Healthcare (Singapore and Japan) 2.59 4.9 -9.3
Other Property Trusts
40 Accordia Golf Trust Golf Courses (Japan) 0.50 8.5 -26.6
41 Ascendas India Trust Industrial (India) 1.04 6.7 -2.6
42 Dasin Retail Trust Retail (China) 0.85 8.8 6.0
43 Hutchison Port Holdings Trust Port Assets (Hong Kong and China) 0.26 8.9 -33.3
44 Keppel Infrastructure Trust Infrastructure (Singapore) 0.46 8.4 -13.3
45 RHT Health Trust Healthcare (India) 0.74 7.0 -6.1
REIT ETFs
45 Lion-Phillip S-REIT ETF ETF 0.96 5.2 -2.9
46 NikkoAM-Straits Trading Asia Ex Japan REIT ETF1 ETF 1.08 N.A. -6.9
47 Phillip SGX APAC Dividend Leaders REIT ETF ETF 1.35 N.A. -4.9

+ Based on OCBC Investment Research Indications

++ From Bloomberg Markets

1 From Bloomberg Markets

What Happened In 2018 So Far?

As you can see, majority of the returns by REITs have been in the negative territory. While the increase in interest rate definitely has some bearings on this outcome, we cannot ignore the fact that majority of the global markets have experienced a dip in 2018.

This is why the negative returns for REITs in 2018 should not be the only factor to keep you away from investing in this asset class.

Read Also: Investing In Property VS REITs: 10 Ways They Are Different

The best performing REIT in YTD 2018 is CapitaLand Mall Trust. While retail REITs have not been in favour due to burgeoning e-commerce in recent years, the ongoing US-China trade war has taken some of the shine off other REIT types such as industrial, logistics and offices.

Other REITs that posted a good return includes retail focused Dasin Retail Trust (6.0%) and Mapletree Commercial Trust (5.0%), as well as Sabana REIT (5.4%) and IREIT (4.2%).

Read Also: Complete Guide To Investing In Singapore REITs

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