Singapore REIT (Hospitality Sector): Watch for turnaround play

Singapore REIT (Hospitality Sector) is one of the under value sector base on Price/NAV.

The distribution yield for Far East H Trust, Ascott REIT, OUE HTrust, Frasers HT, CDL HT and Ascendas HT are all more than 6%.

Look out for turnaround leading indicators when this sector is in rotation again which give a very good upside potential.


Bubble chart derived from April 8, 2017 Singapore REITs Fundamental Comparison Table.

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Previous analysis on Singapore REIT Hospitality sector.


Information on “How to invest in Singapore REITs?” can be found here.

Singapore REIT Stock Shortlisting Bubble Charts April 2017 – Pick the Gems!

Bubble chart derived from April 8, 2017 Singapore REITs Fundamental Comparison Table. From the charts, it can be seen that the yield spread between  big cap and small cap REITs  are widened, which means that the gems are within the small and medium cap REITs which offer attractive valuation and yield. However, we have to be very cautious in the selection as some of those REITs have declining DPU for past few quarters.

Disclaimer: The analysis is for Author own use and NOT to be used as Buy / Sell recommendation. Get a proper training on “How to use this Singapore REIT Bubble Charts?” here.

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These Bubble Charts are used to show the “relative” position compare to other Singapore REITs.

Two visual bubble charts to pick and avoid:

  1. Undervalue Singapore REITs with High Distribution Yield** (Value Pick)
  2. Overvalue Singapore REITs with High Gearing Ratio (Risk Avoidance)

** Distribution Yield are lagging.

Singapore REIT Fundamental Analysis Comparison Table – 8 April 2017

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increases from 732.6  to 762.19 (+4.03%) ( compare to last post on Singapore REIT Fundamental Comparison Table on Mar 6, 2017. The index has broken 200D SMA resistance at about 740 but currently facing a declining resistance at 760. Also take note that all three simple moving averages are trending upward for the REIT index. Next resistance at 780.   SGX S-REIT (REIT.SI) Index increases from 1,135.36 to 1,172.85 (+3.30%).


  • Price/NAV increases from 0.967  to 0.998 (Singapore Overall REIT sector is at fair value now).
  • Distribution Yield decreases from 7.03% to 6.78% (take note that this is lagging number). More than half of Singapore REITs (17 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 no change at 34.76%.  21 out of 40 have Gearing Ratio more than 35%.
  • Most overvalue is Ascendas iTrust (Price/NAV = 1.57), followed by Parkway Life (Price/NAV = 1.53), FIRST REIT (Price/NAV = 1.327),  Keppel DC REIT (Price/NAV = 1.312) and Mapletree Industrial Trust (Price/NAV = 1.31)
  • Most undervalue (base on NAV) is Far East HTrust (Price/NAV = 0.659), followed by  Sabana REIT (Price/NAV = 0.682), Fortune REIT (Price/NAV = 0.695) and Keppel REIT (Price/NAV = 0.734)
  • Highest Distribution Yield is SoilBuild BizREIT (9.30%), followed by Viva Industrial Trust (8.81%) and Lippo Malls Indonesia Retail Trust (8.70%)
  • 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 increases from 0.22% to 0.57%.


  • 1 month increases from  0.71538% to 0.74833%
  • 3 month decreases from   0.94005% to 0.94580%
  • 6 month decreases from 1.24800% to 1.24700%
  • 12 month stays at  1.38000%


The Singapore Manufacturing PMI increased to 51.2 in March of 2017 from 50.9 in the previous month. The reading pointed to the strongest expansion in a factory activity since November of 2014, driven by higher levels of new orders, new exports, factory output, inventory, and employment. In contrast, finished goods and order backlog showed slower expansion. Also, the PMI for electronics sector rose to 51.8 from 51.4 in February. 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.

Fundamentally the whole Singapore REITs is at its fair value in average. There are also sign of recovery in Office and Hospitality sectors where the quarterly DPU has started to increase again.

Technically Singapore REITs has broken the 200D SMA resistance and looks like starting an uptrend. However, the Singapore REITs Index has to clear 760 and 780 resistances to confirm the start of bullish trend.

The Singapore REITs seem have fully priced in the 2 remaining rate hikes this year as investors are back to hunt for REITs with good fundamental. There are still some value picks for  REITs with good fundamental but we have to be very selective. If you want to know how to identify those REITs, check out the next Investing in Singapore REIT course here.

See my Singapore REIT 2017 Market Outlook here.

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