Real Estate Investment Trusts (REITs) are a favourite investment for Singapore investors. This is primarily due to its property-heavy investments and relatively high distribution yields.
REITs Share Price Performance In 1st Half 2019
The first aspect of figuring out how REITs have done in the first half of 2019 is to look at how its share price has moved in the year-to-date (ytd) 2019. The chart below shows the price movements of the SGX S-REIT 20 Index, comprising the top 20 REITs listed in Singapore.
As we can see, its share price has increased 10.3% since the start of the year, to 1337.3. However, looking at the past quarter, prices does look like it has taken a slight dip.
Source: ShareInvestor
In general, REITs have had a strong performance, in terms of just price appreciation, in the first half of the year. While a well-balanced portfolio of REITs, retail investors should have seen a price appreciation of their portfolio of close to 10.3%.
Read Also: REIT Management Fees: 4 Things You Need To Know About It
Of course, there is also another aspect of returns that REIT investors are interested in – distributions. To look at this figure, we analyse the total returns (which include share price appreciation and distributions) that REITs have delivered in the first half of ytd 2019. We also indicate the dividend yield for the REIT in the year.
To-date, there are 50 SGX-listed REITs, business trusts and related ETFs.
REITs Total Return In 1st Half 2019
| No. | All REITs, Stapled Securities And Other Trusts
(Property Locations) |
Price On 27 May 2019 (SGD) | Dividend Yield + | Return In YTD 2019 + |
| REITs and Stapled Securities | ||||
| Commercial/Office REITs | ||||
| 1 | CapitaLand Commercial Trust
(Singapore) |
$1.92 | 4.7% | 12.3% |
| 2 | Cromwell European REIT (EUR)
(Denmark, France, Germany, Italy, and the Netherlands) |
€0.495 | 8.3% | 16.1% |
| 3 | Frasers Commercial Trust
(Singapore and Australia) |
$1.47 | 6.6% | 10.9% |
| 4 | IREIT Global
(Germany) |
$0.745 | 7.7%++ | 6.7% |
| 5 | Keppel REIT
(Singapore and Australia) |
$1.21 | 4.7% | 8.6% |
| 6 | Keppel-KBS US REIT (USD)
(USA) |
US$0.73 | 8.1% | 24.0% |
| 7 | Manulife REIT (USD)
(USA) |
US$0.85 | 7.1% | 17.1% |
| 8 | OUE Commercial REIT
(Singapore, China) |
$0.49 | 6.9% | 9.3% |
| 9 | Suntec REIT
(Singapore) |
$1.81 | 5.5% | 4.9% |
| Retail REITs | ||||
| 10 | BHG Retail REIT
(China) |
$0.72 | 6.8%++ | 4.2% |
| 11 | CapitaLand Mall Trust
(Singapore) |
$2.44 | 4.9% | 10.0% |
| 12 | CapitaRetail China Trust
(China) |
$1.49 | 6.8% | 13.3% |
| 13 | Fortune REIT (HKD)
(Hong Kong) |
HK$10.72 | 5.0% | 23.4% |
| 14 | Frasers Centrepoint Trust
(Singapore, Malaysia) |
$2.40 | 5.1% | 14.5% |
| 15 | Lippo Malls Indonesia Trust
(Indonesia) |
$0.21 | 11.4% | 20.1% |
| 16 | Mapletree Commercial Trust
(Singapore) |
$1.91 | 4.9% | 18.7% |
| 17 | Mapletree North Asia Commercial Trust
(China and Hong Kong, Japan) |
$1.32 | 6.0% | 19.3% |
| 18 | Sasseur REIT
(China) |
$0.80 | 8.1% | 31.7% |
| 19 | SPH REIT
(Singapore) |
$1.05 | 5.4% | 7.8% |
| 20 | Starhill Global REIT
(Singapore, Australia, Malaysia and others) |
$0.75 | 6.3% | 13.7% |
| Industrial REITs | ||||
| 21 | AIMS APAC REIT
(Singapore and Australia) |
$1.39 | 7.4% | 8.5% |
| 22 | Ascendas REIT
(Singapore, Australia and UK) |
$2.95 | 5.6% | 17.9% |
| 23 | Cache Logistics Trust
(Singapore and Australia) |
$0.725 | 8.3% | 8.7% |
| 24 | EC World REIT
(China) |
$0.805 | 7.7% | 21.3% |
| 25 | ESR-REIT
(Singapore) |
$0.54 | 8.1% | 9.7% |
| 26 | Frasers Logistics & Industrial Trust
(Australia, Germany, Netherlands, ) |
$1.17 | 6.0% | 17.1% |
| 27 | Keppel DC REIT
(Singapore, Malaysia, Australia, Germany, Netherlands, Ireland, UK, Italy) |
$1.58 | 5.0% | 20.0% |
| 28 | Mapletree Industrial Trust
(Singapore) |
$2.10 | 6.0% | 13.3% |
| 29 | Mapletree Logistics Trust
(Singapore, Japan, Hong Kong and others) |
$1.48 | 5.5% | 20.9% |
| 30 | Sabana REIT
(Singapore) |
$0.42 | 7.1% | 11.5% |
| 31 | Soilbuild Business Space REIT
(Singapore, Australia) |
$0.59 | 8.3% | 6.2% |
| Hospitality REITs | ||||
| 32 | ARA US Hospitality Trust
(USA) |
US$0.865 | N.A. | -2.3%++ |
| 33 | Ascendas Hospitality Trust
(Australia, Japan, Singapore and China) |
$0.90 | 6.6% | 21.1% |
| 34 | Ascott Residence Trust
(Japan, China, Singapore, USA and others) |
$1.19 | 6.1% | 14.0% |
| 35 | CDL Hospitality Trust
(Singapore, Australia, Maldives, New Zealand, Japan, United Kingdom) |
$1.62 | 5.9% | 14.3% |
| 36 | Eagle Hospitality Trust
(USA) |
US$0.70 | N.A. | -10.3% |
| 37 | Far East Hospitality Trust
(Singapore) |
$0.635 | 6.6% | 8.1% |
| 38 | Frasers Hospitality Trust
(Singapore, UK, Japan, Australia and Germany) |
$0.705 | 6.7% | 3.8% |
| 39 | OUE Hospitality Trust
(Singapore) |
$0.67 | 7.6% | 3.5% |
| Healthcare REITs | ||||
| 40 | First REIT
(Indonesia, Singapore, South Korea) |
$0.99 | 8.9% | 4.9% |
| 41 | Parkway Life REIT
(Singapore and Japan) |
$2.91 | 4.5% | 13.2% |
| Other Property Trusts | ||||
| 42 | Accordia Golf Trust
(Japan) |
$0.62 | 7.2% | 22.8% |
| 43 | Ascendas India Trust
(India) |
$1.30 | 6.2% | 23.9% |
| 44 | Dasin Retail Trust
(China) |
$0.875 | 8.2% | 5.4% |
| 45 | Hutchison Port Holdings
(Hong Kong and China) |
US$0.235 | 8.2% | 0.2% |
| 46 | Keppel Infrastructure Trust
(Singapore) |
$0.47 | 8.3% | 1.9% |
| REIT ETFs ++ | ||||
| 48 | Lion-Phillip S-REIT ETF | $1.083 | 3.9% | 13.6%++ |
| 49 | NikkoAM-Straits Trading Asia Ex Japan REIT ETF | $1.223 | 3.9% | 13.3%++ |
| 50 | Phillip SGX APAC Dividend Leaders REIT ETF | $1.492 | 3.6% | 14.9%++ |
+ Based on OCBC Investment Research Indications
++ From Bloomberg Markets
2 New REITs Listed In Singapore In May 2019
Surprisingly, before May, Singapore hadn’t had a REIT listing in the year. In May, there was two USA-focused hospitality REITs that listed – ARA US Hospitality REIT in 9 May 2019 and Eagle Hospitality Trust in 24 May 2019. Both REITs has experienced a share price decline since its opening days.
On the back of this, new REITs that list in the Singapore market will have to closely relook the properties they want to inject into their REIT to ensure that investors here want to include them into their portfolio. Properties that are seen to be sub-par or facing headwinds may suffer similar interest levels.
On the other hand, RHT Hospitality Trust, an India-focused healthcare REIT, disposed of its entire assets to its controlling shareholders on 16 January 2019. While the ticker is still being traded on the Singapore Exchange (SGX), it longer has the properties. If it is unable to meet listing requirements within 18 months (from its asset disposal date), it will be required to be delisted.
Apart from new listing, one way that we can get exposure to new properties globally, is when REITs themselves acquire new properties. In 2019, Frasers Centrepoint Trust, Sassuer REIT, Manulife US REIT and EC World REIT are some of the REITs that have raised funds this way.
Read Also: Applying For REITs Rights Issue: Here What You Need To Know
Impact Of Interest Rates On REITs In The Coming Months
In our recent quarterly REITs report cards, interest rate hikes have featured heavily in the discussion. This is because REITs are typically highly leveraged, borrowing money to fund their property purchases.
Looking at the past 1-year period, in the middle of 2018, markets were expecting more interest rate hikes, and at a faster pace, in the next few quarters. By the time we reached the end of 2018, the conversation was firmly about how REITs would perform in a rising interest rate environment. When we reached the first quarter of 2019, the conversation was skewed towards a slower pace but continued increase in interest rates. And, today, we have turned a full 180 degrees – talking about no interest rate hikes or even interest rate cuts by the end of 2019!
For most retail investors, we can’t be sure of where interest rates are headed. We can keep up with the news, but it has shown that it can turn from optimistic to pessimistic, and perhaps even optimistic again in the span of several quarters.
What we should be more interested in is investing in high quality REITs that can ride out short-term market fluctuations to give investors long-term returns.
Read Also: Complete Guide To Start Your REITs Investing Journey In Singapore
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