Money and Me: S-REITs’ 2023 outlook

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3 January 2023

Money and Me: S-REITs’ 2023 outlook

Which SREITs stand to become beneficiaries of investors seeking resilient yield and growth opportunities in a high interest rate environment? And with China taking a major step towards reopening its borders, is it finally time to stock up on companies with high exposure to the Chinese market?

Start your year right with Michelle Martin as she speaks to Kenny Loh, REIT Specialist and Independent Financial Advisor about his thoughts on the performance of SREITs in 2023 and some sectors to avoid during this period of volatility.




0:17 Intro

1:45 JP Morgan’s cautious outlook for Singapore REITs, expecting declines in DPU and economic slowdown weighing on share price performance. What are your thoughts? Do you agree?

  • Yes, I agree. But not all REITs will be affected to the same extent. It depends on individual REIT’s performance and their management.
  • However, a severe recession and/or high Fed Fund Rates may affect REIT’s performance more negatively

3:52 Which REIT sectors do you think offer resilience?

  • Industrial Sector. WALE is comparatively higher and has delivered consistent DPU for the past few quarters. Also is much harder for Industrial Sector tenants to ‘move out’
  • Most vulnerable: I think the US Commercial Office Sector. For Example, Manulife US REIT announced a ~10% drop in portfolio valuation.
    • WFH trend still exists, therefore still low occupancy. Valuers are using a higher discount rate due to the higher Fed Fund Rate.

6:01 Many expect Fed Fund Rates to go over 5%. Which REITs could be attractive for investors looking for ‘safe harbours’?

  • I think 2 Sectors: Hospitality and Retail, due to the China reopening barring any new COVID variants. Chinese travelers embarking on ‘revenge spending and revenge traveling’.

7:10 Do you think Rate Hikes will influence share price movement of S-REITs, and if so, how much?

  • S-REITs have already been priced in a Terminal Rate of about 5%. 
  • But not a recession. We do not know if we will enter a severe recession, and will REITs’ bottom lines be affected.

6:41 Do you think S-REITs factored in additional rate hikes in their share price valuation?

  • Yes, looks like it has factored in a Fed Fund 5% rate. The recent lowering of government bond yields has increased yield spread.

8:26 Raising GST to 8% and then 9%: How do you think this will affect S-REIT investors?

  • I don’t think there’ll be any impact. 
  • GST hike only affects local consumption in Singapore. Many REITs have overseas presence; these REITs shouldn’t see any impact.
  • Also, many travelers (e.g. Chinese tourists embarking on revenge traveling) won’t bother about this 1% GST hike.
  • For the tenant side, 1% won’t move tenants away. Too much of a hassle 

10:21 China’s reopening: China was Singapore’s largest source of inbound tourism. Is it time to look at S-REITs with China exposure?

  • We should be selective and careful.
  • Generally, Singapore REITs with China Exposure have poor balance sheets. 
  • Also potentially increased difficulty faced by S-REITs in refinancing due to debt crises in China. E.g., EC World REIT in 2022

12:10 EC World REIT has announced divesting of 2 assets in October 2022. With China reversing its COVID policies, what does this mean for EC World?

  • The challenge for EC World REIT is debt management.
  • 100% of its debt is secured, also they have a very short debt maturity period.
  • Unlikely to divest at a good price. But they have no choice

14:45 SPH REIT has been renamed to Paragon REIT. What does this mean for Paragon REIT?

  • Paragon sounds more ‘atas’, SPH feels older in my opinion.
  • 3 Possibilities, how I look at it:
    • 1. Acquisitions should continue, for example Seletar Mall in the pipeline. However, it is not easy in this current high interest rate environment.
    • 2. Mapletree has a stake in Cascaden Peak (Sponsor of Paragon REIT). MPACT also has a very similar investment mandate of Asia-Pacific Retail/Office properties; I can see a potential merger on the horizon.
    • 3. Acquired by Link REIT? Link REIT are expanding into Singapore.

18:21 Outlook on S-REITs in 2023?

  • Many opportunities in the S-REIT space! Most REITs are undervalued right now (according to Price/NAV value)
  • Rising interest rates will dampen portfolio valuations

Note: The above analysis are my own personal views and are NOT buy or sell recommendations. Investors who would like to leverage my extensive research and years of Singapore REIT investing experience can approach me separately for a REIT Portfolio Consultation.


Listen to his previous market outlook interviews here:




Kenny Loh is an Associate Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also invited speaker of REITs Symposium and Invest Fair.  

You can join my Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement related news.

Continue ReadingMoney and Me: S-REITs’ 2023 outlook

Singapore REIT Monthly Update (January 1st 2023)

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Happy New Year!!

Technical Analysis of FTSE ST REIT Index (FSTAS351020)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased from 723.18 to 725.07 (0.26%) compared to last month’s update. The REIT Index has rebounded from the sell-off in September and October and since early November has been within the range of 714 and 742. It has been moving sideways for the past 2 months. This is a typical flag pattern after a strong move.

  • Short-term direction: Sideways (20D SMA is moving sideways)
  • Medium-term direction: Sideways (50D SMA is moving sideways)
  • Long-term direction Down (200D SMA is sloping down)
  • Immediate Support at 714
  • Immediate Resistance at 742

2 years FTSE REIT Index Chart


Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on December 4th, 2022.


Fundamental Analysis of 38 Singapore REITs

The following is the compilation of 38 Singapore REITs with colour-coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio.

  • The Financial Ratios are based on past data and these are lagging indicators.
  • This REIT table takes into account the dividend cuts due to the COVID-19 outbreak. Yield is calculated trailing twelve months (ttm), therefore REITs with delayed payouts might have lower displayed yields, thus yield displayed might be lower for more affected REITs.
  • All REITs highlighted in orange are now updated with the latest Q3 2022 business updates/earnings.
  • SPH Reit will be renamed to Paragon REIT from January 3rd, 2023, onwards.
  • Manulife US REIT (highlighted in blue) has Gearing, Price/NAV and NAV/Unit values updated according to the recent media conference. 

Data from StocksCafe REIT Screener.



What does each Column mean?

  • FY DPU: If Green, FY DPU for the recent 4 Quarters is higher than that of the preceding 4 Quarters. If Lower, it is Red.
  • Yield (ttm): Yield, calculated by DPU (trailing twelve months) and Current Price as of December 30th 2022.
    • Digital Core REIT and Daiwa House Logistics Trust: Yield calculated from trailing six months distribution, TTM yield is annualised.
  • Gearing (%): Leverage Ratio.
  • Price/NAV: Price to Book Value. Formula: Current Price over Net Asset Value per Unit.
  • Yield Spread (%): REIT yield (ttm) reference to Gov Bond Yields. REITs trading in USD is referenced to US Gov Bond Yield, everything else is referenced to SG Gov Bond Yield.

Price/NAV Ratios Overview

  • Price/NAV remained at 0.80. 
    • Remained at 0.80 since December 2022.
    • There has been a recent sell-off in September-October period.
    • Singapore Overall REIT sector is undervalued now.
    • Take note that NAV is adjusted upwards for some REITs due to pandemic recovery.
  • Most overvalued REITs (based on Price/NAV)
    • Parkway Life REIT (Price/NAV = 1.58)
    • Keppel DC REIT (Price/NAV = 1.29)
    • Capitaland Ascendas REIT (Price/NAV = 1.15)
    • Mapletree Industrial Trust (Price/NAV = 1.15)
    • Mapletree Logistics Trust (Price/NAV = 1.09)
    • ESR-LOGOS REIT (Price/NAV = 1.01)
    • Only 6 REITs are overvalued now based on Price/NAV value.
    • No change in the Top 2 compared to the past 2 months.
  • Most undervalued REITs (based on Price/NAV)
    • Lippo Malls Indonesia Retail Trust (Price/NAV=0.34)
    • Prime US REIT (Price/NAV = 0.47)
    • ARA US Hospitality Trust (Price/NAV = 0.49)
    • Manulife US REIT (Price/NAV = 0.55)
    • Keppel Pacific Oak US REIT (Price/NAV = 0.55)
    • EC World REIT (Price/NAV = 0.56)

Distribution Yields Overview

  • TTM Distribution Yield increased to 7.90%.
    • Increased from 7.67% in December 2022.
    • 19 of 40 Singapore REITs have distribution yields of above 7%.
    • Do take note that these yield numbers are based on current prices taking into account the delayed distribution/dividend cuts due to COVID-19, and economic recovery. The recent sell-off contributed to the increase in average yield.
    • 9 REITs have a ttm yield of over 10%!
  • Highest Distribution Yield REITs (ttm)
    • Manulife US REIT (17.67%)
    • Prime US REIT (17.21%)
    • Keppel Pacific Oak US REIT (13.48%)
    • United Hampshire US REIT (12.82%)
    • EC World REIT (12.74%)
    • Lippo Malls Indonesia Retail Trust (12.00%)
    • Reminder that these yield numbers are based on current prices taking into account delayed distribution/dividend cuts due to COVID-19.
    • Some REITs opted for semi-annual reporting and thus no quarterly DPU was announced.
    • A High Yield should not be the sole ratio to look for when choosing a REIT to invest in.
  • Yield Spread widened to 4.69%.
    • Widened slightly from 4.61% in December 2022.

Gearing Ratios Overview

  • Gearing Ratio increased to 37.20%. 
    • Increased from 37.03% from December 2022.
    • Gearing Ratios are updated quarterly. Only Manulife US REIT have an updated gearing ratio value in the past month.
  • Highest Gearing Ratio REITs
    • Manulife US REIT (49.0%)
    • Lippo Malls Indonesia Retail Trust (43.7%)
    • ARA Hospitality Trust (43.3%)
    • Suntec REIT (43.1%)
    • United Hampshire US REIT (42.1%)
    • Elite Commercial REIT (41.9%)

Market Capitalisation Overview

  • Total Singapore REIT Market Capitalisation increased by 0.26% to S$95.36 Billion.
    • Increased from S$95.11 Billion in December 2022.
  • Biggest Market Capitalisation REITs:
    • Capitaland Integrated Commercial Trust ($13.52B)
    • Capitaland Ascendas REIT ($11.51B)
    • Mapletree Pan Asia Commercial Trust ($8.74B)
    • Mapletree Logistics Trust ($7.64B)
    • Mapletree Industrial Trust ($6.00B)
    • Frasers Logistics & Commercial Trust ($4.31B)
    • No change in the rankings since September 2022.
  • Smallest Market Capitalisation REITs:
    • Lippo Malls Indonesia Retail Trust ($231M)
    • BHG Retail REIT ($257M)
    • ARA Hospitality Trust ($267M)
    • United Hampshire US REIT ($349M)
    • EC World REIT ($360M)
    • Elite Commercial REIT ($365M)
    • No change in the top 3 rankings from last 2 month’s update.

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. If you want to know more about investing in REITs, here’s a subsidised 2-day course with all you need to know about REITs and how to start investing in them.


Top 20 Worst Performers of the Month in December 2022



SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 3.11% (increased from 3.00%)
  • US 10 Year: 3.88% (increased from 3.49%)


Major REIT News in December 2022


Hong Kong’s Link Real Estate Investment Trust (REIT) enters Singapore market

CNA: Hong Kong-listed Link Real Estate Investment Trust (REIT) is buying a portfolio of Singapore shopping malls for S$2.16 billion (US$1.6 billion) from Mercatus Co-operative in its first foray into the country. The deal is for the acquisition of suburban retail assets Jurong Point and Swing By @ Thomson Plaza, along with a 10-year asset and property management service agreement for a third suburban mall, AMK Hub, which will remain under the ownership of Mercatus, Link REIT said in a stock exchange filing on Wednesday (Dec 28).

“This transaction allows us to build a dedicated team in Singapore and provides a base for Link to expand further into other asset classes and strategies in Asia Pacific,” Link CEO George Hongchoy said in a statement. Link, Asia’s biggest REIT, said it will fully fund the purchase through cash and debt, adding that it is in active discussions with investors and open to bringing in capital partners.

The announcement confirms a Reuters report in November that cited sources saying Link REIT was the frontrunner to buy the assets from Mercatus, a unit of Singapore shopping mall owner NTUC Enterprise Co-operative, in what would be Southeast Asia’s biggest real estate transaction of 2022. Read More


SPH REIT renames to Paragon REIT from January 3rd, 2023

THE BUSINESS TIMES: SPH Real Estate Investment Trust (Reit) will be renamed to Paragon Reit as the name change will better reflect the trust’s vision and mission to capture unique opportunities in the Asia-Pacific retail landscape, the Reit manager said on Thursday (Dec 29). The names of its security, counter and manager – along with the Reit’s logo and website – will reflect the new name with effect from 9 am on Jan 3, 2023. The Reit manager added that the trust will be “bolstered by the deep real estate sector knowledge and strong relationships” of its sponsor, Cuscaden Peak Investments.


Cuscaden Peak Investments was formerly known as Singapore Press Holdings, and is a wholly-owned subsidiary of Cuscaden Peak. Cuscaden Peak is a consortium comprising tycoon Ong Beng Seng’s Hotel Properties Limited, and Temasek-linked CLA Real Estate Holdings and Mapletree. The Reit’s existing counter code – “SK6U” – on the Singapore Exchange will remain unchanged.

It will also continue to be led by the current management team, retain its investment mandate, and manage its existing portfolio of assets. Read More



Fundamentally, the whole Singapore REITs landscape remains very undervalued based on the average Price/NAV (at 0.80) value of the S-REITs, which is quite rare that S-REIT is trading at such huge discount with a very attractive DPU yield of 7.90%! This is even higher than that of last month. Below is the market cap heat map for the past 1 month.

Interestingly, despite 24 REITs being bearish and only 10 REITs being bullish in the past month, market cap overall has increased very slightly by 0.26%. This is due to larger market cap REITs doing well (eg. Capitaland Ascott Trust (S$3.5B, 11.11%), ESR-LOGOS REIT (S$2.5B, 7.25%), Frasers Centrepoint Trust (S$3.6B, 3.45%). Only 3 of the bottom 12 performing REITs have market capitalisations of over S$1B. The top 5 largest Market Cap REITs have performances varying between -0.45% and -2.34%.




Yield spread (in reference to the 10-year Singapore government bond yield of 3.11% as of 30th December 2022) widened from 4.61% to 4.69%. This is a slight increase of 0.08% due to the share price erosion outpaces in the increase of the risk-free rate. 

Technically, FTSE ST REIT Index is trading in a bearish territory but rebounded strongly from the support level. The index is forming a flag pattern (either bull flag or bear flag) and future direction is unknown until the breakout. Breaking up from the flag pattern shows the continuation of the bullish rebound. However, breaking down from the flag pattern indicates the previous rebound is just a dead cat bounce and the REIT index may crash down to test the support of 665 level.  Based on the current overall S-REIT P/NAV of 0.80 and the potential peaking of interest rate in Q2/Q3 2023, the probability to have a severe crash in S-REIT is low unless we are entering into severe recession with big drop in DPU and US Fed continues to increase the interest rate fiercely beyond 5%.


Interview with Phillip Capital: Get A Slice of Property Action with REITs

Recently I had an interview with The Financial Coconut. You can view the video below. Questions that I answered include:

  • About Kenny Loh (0:50)
  • Short to mid-term outlook for global markets (1:11)
  • Current Investment Sentiments (1:54)
  • What is the best time to invest? Why invest during the bear market (3:15)
  • What sectors/asset classes should I invest in? (3:43) REITs’ valuation per unit has reached lower than during the 2020 COVID Crash.
  • Why REITs are very attractive now & market outlook (4:40)
  • What is a REIT? (6:48)
  • Pros and Cons of investing in REITs. Are REITs the right investment instrument for you? (7:55)
  • What are Thematic Portfolios? (Portfolio Themes) (9:17)
    • Technology Disruption
    • China’s Economic Growth
    • Decarbonisation
  • Advice on weathering the current grim investment outlook (11:36)

Note: This above analysis is for my own personal research and it is NOT a buy or sell recommendation. Investors who would like to leverage my extensive research and years of Singapore REIT investing experience can approach me separately for a REIT Portfolio Consultation.

Kenny Loh is an Associate Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also invited speaker of REITs Symposium and Invest Fair.  You can join my Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement related news.

Continue ReadingSingapore REIT Monthly Update (January 1st 2023)

Why Forex Liquidity Is Important for Brokers

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A forex broker requires a good amount of liquidity. For them, this is just as important as
having a well-stocked medicine cabinet as a doctor. But what exactly is liquidity, and
why is it so important for brokers? Well, we are just about to find out.

What Is Forex Liquidity and Why Is It Important?

Forex liquidity is the ability of a currency pair to be purchased and sold, without
creating too big of an impact on the exchange rate. A currency pair is seen as “highly
liquid” when you can buy and sell it with ease, creating a fair amount of trading activity.
Liquidity is a key factor in ensuring a trade remains profitable. The bigger the liquidity,
the more the transactions can flow, leading to much better prices, quicker execution,
and cheaper spreads.
Working with more liquidity can ensure the forex broker enjoys extra security with their
trades. They can make a transaction quickly and at lower costs, making sure that the
trends prevail. This is very important for brokers, as it helps them satisfy the needs of
their customers.
Brokers with high liquidity can also trade assets multiple times per day. This means that
there is an increased chance for profit, as it keeps demand and trading volume very
Without forex liquidity, a broker can suffer the consequences of price fluctuations.
When there is no liquidity, it is not easy to exchange the assets, therefore muting the
activity on the market. This can lead to great losses.

What Is Forex Liquidity Affected By?

The factors that can affect forex liquidity are:

1. Broker Operation Level

Forex liquidity is affected by a variety of things. The scale of operation for the broker is
the most important. For example, if you are working with a well-known broker with a
diversified portfolio, you may end up getting more liquidity. On the other hand, if they
do not have that big of a reputation, the liquidity may also be much lower.

2. General Marketplace

Liquidity may also be affected by the general marketplace. For example, those dealing
with more popular pairs of currencies may have more liquidity, mainly because they

have more funds available for trading. If the currencies are less popular, the trading
volume is lower, potentially negatively affecting the trades.

3. Type of Client

The client types that the brokers interact with can also affect liquidity. For example, if
the broker works mostly with institutional investors, they will be more likely to have
access to more market liquidity. Forex brokers accepting clients from the United States
will be more prone to sign institutional investors. Retail investors can bring a decent
amount of liquidity, but it will still be lower in comparison to the former.

The Bottom Line

Liquidity is important for brokers as it gives them a better chance of making an easy,
profitable trade. Without enough liquidity, it is very easy for a trade to stagnate or end
up in a loss.


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