2017 Singapore REIT Market Outlook Summary (Mar 22, 2017 Seminar at CIMB)

Another full house for #SingaporeREIT sharing and market outlook session at CIMB Singapore. I shared about the interest rate impact on Singapore REIT after Fed’s rate hike and opportunities in different REIT sectors. Prepare for the sector rotation!

Below is my summary for Singapore REIT 2017 Market Outlook.

Disclaimer: This summary slide is time sensitive and for education purpose only. It should not be used to make any investing decision.

 

Check out next coming up Singapore REIT Investing course here.

 

Events

 

 

DIY Own Portfolio or Subscribe this NikkoAM-StraitsTrading Asia ex Japan REIT ETF IPO?

Many readers asked me about this NikkoAM-StraitsTrading Asia ex Japan REIT ETF. Should they subscribe or not subscribe?

My answer: It depends on you.

  1. If you know how to Build a Diversified REIT portfolio consists of different sectors from Industrial, Commercial Office, Hospitality, Healthcare and Retail Malls using Core-Satellite portfolio strategy, the answer is NO.
  2. If you know how to select a fundamental strong REIT and know how to optimize your entry & exit, you can do a much better job than this NikkoAM-StraitsTrading Asia ex Japan REIT ETF which can only give you a 5% annual distribution yield. You can refer to the following yield comparison which model the NikkoAM-StraitsTrading Asia ex Japan REIT ETF composition. Just use a copy exactly DIY portfolio already give you a 5.94% compare to 5% distribution yield (note: exclude cost of diversification if your portfolio size is small).
  3. Combining the knowledge of Singapore REITs Selection and Building a Diversified Portfolio, you can easily get an annual distribution yield of more than 6%

 

My coming courses will address the above 3 points. Click the links below to find out more about the two courses.

 

See previous post on NikkoAM-StraitsTrading Asia ex Japan REIT ETF IPO here.

See other seminars / courses / events here.

Events

 

Singapore REIT Fundamental Analysis Comparison Table – 6 March 2017

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increases from 732.7  to 732.6 (-0.01%) ( compare to last post on Singapore REIT Fundamental Comparison Table on Feb 5, 2017. The index is currently hovering around 200D SMA and moving sideway. FTSE ST Real Estate Investment Trust Index is currently trading within a Rectangle and expected to move within the range between 740 and 700.  SGX S-REIT (REIT.SI) Index increases from 1,127.74  to 1,135.36(+0.68%).

 

  • Price/NAV increases from 0.962 to 0.967 (Singapore Overall REIT sector is slightly under value now).
  • Distribution Yield decreases from 7.13%  to 7.03% (take note that this is lagging number). More than half of Singapore REITs (21 out of 40) have Distribution Yield > 7%. High yield REITs mainly from Hospitality Trust and small cap Industrial REIT, but we must understand the risks while chasing for the high yield. Check out How to spot those Fundamentally strong REIT with attractive yield to build up a Passive Income Portfolio?
  • Gearing Ratio decreases from 34.87% to 34.76%.  21 out of 40 have Gearing Ratio more than 35%.
  • Most overvalue is Ascendas iTrust (Price/NAV = 1.563), followed by Parkway Life (Price/NAV = 1.452), FIRST REIT (Price/NAV = 1.267) and Keppel DC REIT (Price/NAV = 1.253)
  • Most undervalue (base on NAV) is Sabana REIT (Price/NAV = 0.581), followed by Far East HTrust (Price/NAV = 0.643) and Fortune REIT (Price/NAV = 0.667).
  • Highest Distribution Yield is SoilBuild BizREIT (9.74%), followed by Cache Logistic Trust (9.02%) and Viva Industrial Trust (8.98%). All these 3 are small Cap Industrial REITs.
  • Highest Gearing Ratio is Croesus Retail Trust (46.1%), iREIT Global (41.6%), Sabana REIT (43.2%) and Cache Logistic Trust (43.1%).

 

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation.

 

  • Singapore Interest Rate decreases from 0.46% to 0.22%.

 

  • 1 month increases from 0.71463% to 0.71538%
  • 3 month decreases from  0.96188% to 0.94005%.
  • 6 month increases from 1.24700% to 1.24800%
  • 12 month decreases from 1.43517% to 1.38000%

 

The Singapore Manufacturing PMI decreased slightly to 50.9 in February of 2017 from 51 in the previous month. The reading pointed to the to the sixth consecutive expansion in a factory activity, while new orders, exports, and factory output rose at a slower pace. Also, the PMI for electronics sector declined to 51.4 from 51.8 in January. Manufacturing PMI in Singapore averaged 50.03 from 2012 until 2016, reaching an all time high of 51.90 in October of 2014 and a record low of 48.30 in October of 2012.

The GDP in Singapore advanced an annualized 12.3 percent on quarter in the last three months of 2016, recovering from a 0.4 percent contraction in the previous quarter and above earlier estimates of 9.1 percent. It is the strongest growth rate since the first quarter of 2011, mainly due to a rebound in manufacturing (+39.8 percent from -5 percent in Q3). GDP Growth Rate in Singapore averaged 6.86 percent from 1975 until 2016, reaching an all time high of 37.20 percent in the first quarter of 2010 and a record low of -13.50 percent in the fourth quarter of 2008.

Singapore REITs sector is currently range bound and FTSE ST REIT index is expected to trade within a range between 700 to 740. 700 support level could be a good level to accumulate some fundamental strong REITs as the valuation base on Price/NAV and Distribution yield can become attractive again.  Two questions may interest all the retail investors: WHEN is the right and safe time and WHAT REIT to pick? Check out the next Investing in Singapore REIT course here.

See my Singapore REIT 2017 Market Outlook here.

Original post from http://mystocksinvesting.com

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