In the second quarter of 2022, the Straits Times Index (STI) delivered a negative 8% total return. This isn’t that surprising as global markets have been extremely volatile in that time – marked by Russia’s invasion of Ukraine, disruptions to supply chains, runaway inflation and rising interest rates.
On the back of this, the SGX reported that institutions have pulled nearly $1.1 billion from Singapore stocks in the second quarter of 2022 on an aggregate basis. Diving deeper, banks, technology and REITs counters have booked the most net institutional outflow across all sectors.
Against this challenging operating backdrop, there were still 5 REITs that managed to attract more institutional funds – pouring in $300 million more into the counters in 2022. This acted as a catalyst for their average 18% total returns on average in the year-to-date 2022.
#1 Ascott Residence Trust (SGX: HMN)
With a diversified portfolio of hospitality properties in Asia Pacific (62%), Europe (19%) and the USA (19%), Ascott Residence Trust (ART) was seen as a beneficiary of the re-opening global economy.
This looks to be playing out too, with its first-quarter 2022 results depicting better revenue and gross profit “due to contributions from newly acquired properties and stronger operating performance”. Its revenue per available unit of properties (RevPAU) rose 22% year-on-year to $67 in 1Q 2022.
In the year-to-date 2022, ART has delivered a total return of 14%. The bulk of its share price increase came in the run-up to both Singapore’s lifting of safe management measures and its 1Q2022 business update release. Promisingly, ART’s share price has held relatively firm since the initial spike.
SGX has also reported ART has seen net inflow of $44 million from institutional funds. This translates to 1.2% of its market capitalisation (of $3.8 billion).
#2 Suntec REIT (SGX: T82U)
As most safe management measures were lifted at the end of April 2022, shoppers and employees could return to Suntec’s integrated shopping mall and office towers.
In Suntec REITs first quarter 2022 business report, it showed plenty of strength. Gross revenue was up 14%, while distribution per unit rose 17%. Looking ahead, its office and retail portfolio both held over 95% committed occupancy rates.
So far, Suntec REIT has delivered a total return of 15% in the year-to-date. The increase was more gradual, from early February 2022 – till its results released in late April. Thereafter, it has declined slightly owing to the heightened global uncertainties.
According to SGX, Suntec REIT has benefitted from a net institutional inflow of about $53 million in the year-to-date. This is about 1.1% of its market capitalisation of $4.9 billion.
#3 CapitaLand Integrated Commercial Trust (SGX: C38U)
Singapore’s largest and most popular REIT (probably), CICT holds numerous established malls and commercial properties across Singapore. Likely Suntec REIT, the lifting of safe management measures was a boon for the REIT.
In its 1Q 2022 business update, better gross revenue. Its portfolio strength was underscored by a portfolio occupancy of nearly 94%. More interestingly, its portfolio retail sales rose 0.6% on average, while its Singapore office portfolio saw rents going up 1.5%.
In the year-to-date 2022, CICT has delivered a total return of 6%. While its 2022 share price peaked during the announcement to lift safe management measures in Singapore (on 26 April 2022), it has held relatively stable after that.
In absolute terms, it also saw the biggest net institutional funds inflow of $154 million. This translates to about 1.1% of its market capitalisation of $14.3 billion.
#4 Frasers Hospitality Trust (SGX: ACV)
FHT is currently the subject of a privatisation deal by Frasers Property. Again, hospitality properties are seen as a beneficiary of global borders re-opening.
In FHT’s latest 1H 2022 result, gross revenue spiked 10%, while distribution to its investors rose more than 3%.
Since the start of 2022, FHT has delivered a total return of 51%. While FHT’s share price rose in anticipation of the safe management measures and positive results in late April, it also benefitted from the recent privatisation offer of $0.70. This was made when its share price was $0.66 before the announcement.
SGX reports that FHT gained a net institution inflow of $13 million in the year-to-date. This represents approximately 1.0% of its $1.3 billion market capitalisation.
#5 Keppel REIT (K71U)
Keppel REIT owns Grade A office buildings in Singapore (78%), Australia (18%) and South Korea (4%). It is yet another beneficiary of employees returning to office in a new normal world.
Its latest 1Q 2022 business update details a 6% increase in its property. It also showcased a retention rate of 91% of its tenants in 1Q 2022.
Keppel REIT fared the poorest among the 5 featured REITs – earning a total return of 3% in the year-to-date 2022. Despite the positive total return, it is also the only REIT on this list with a negative share price movement in the year-to-date 2022.
Nevertheless, SGX reports that Keppel REIT saw a net institutional inflow of $41 million in 2022 so far. This represents about 1.0% of Keppel REIT’s $4.2 billion market capitalisation.
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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.