Singapore REITs Monthly Update (October 8th, 2023)

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Technical Analysis of FTSE ST REIT Index (FSTAS351020)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 702.62 to 646.46 (-7.99%) compared to 2 month’s ago update. The REIT index has broken the Oct 2022’s support at about 660, and heading towards Mar 2020’s low of 600. Technically the REIT index is in bearish territory.

  • Short-term direction: Down 
  • Medium-term direction: Down
  • Long-term direction: Down
  • Immediate Support at 585-600 (Mar 2020 COVID crash)
  • Immediate Resistance at 660

FTSE REIT Index Chart

Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on August 13th, 2023.

 

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.
  • REITs are all highlighted in green, now updated with the latest Q2 2023 business updates/earnings
  • I have introduced weighted average (weighted by market cap) to the financial ratios, in addition to the existing simple average ratios. This is another perspective where smaller market cap REITs do not disproportionately affect the average ratios.

Data from REITsavvy Screener. https://screener.reitsavvy.com/

 

 

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 October 7th, 2023. Notes:
    • ESR-LOGOS REIT and Paragon REIT: Annualised yield, after taking into account switch to semi-annual distribution declaration. For Paragon REIT: calculated after converting from 13 months of distribution to 12 months.
  • 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 decreased to 0.71. (Weighted Average: 0.71)
    • Decreased from 0.78 in August 2023.
    • Singapore Overall REIT sector is very undervalued now.
    • Take note that NAV is adjusted upwards for some REITs due to pandemic recovery.
  • Most overvalued REITs (based on Price/NAV)
    • ParkwayLife Reit (C2PU) 1.64
      Keppel DC Reit (AJBU) 1.47
      Mapletree Ind Tr (ME8U) 1.18
      Capitaland Ascendas Reit (A17U) 1.14
      Mapletree Log Tr (M44U) 1.09
         
    • Only 5 REITs are overvalued now based on Price/NAV value.
    • No change in the Top 2 in the last 6 months.
  • Most undervalued REITs (based on Price/NAV)
    • ManulifeReit USD (BTOU) 0.13
      Prime US Reit USD (OXMU) 0.16
      Lippo Malls Tr (D5IU) 0.21
      KepPacOakReitUSD (CMOU) 0.27
      ARA HTrust USD (XZL) 0.35
      OUE Com Reit (TS0U) 0.38

Distribution Yields Overview

  • TTM Distribution Yield increased to 10.44%. (Weighted Average is 6.92%)    
    • Increased from 9.44% in August 2023 (Weighted Average was 6.42%)
    • 22 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.
    • 12 REITs have a ttm yield of over 10%!
  • Highest Distribution Yield REITs (ttm)
    • Prime US Reit USD (OXMU) 44.63
      ManulifeReit USD (BTOU) 40.38
      KepPacOakReitUSD (CMOU) 24.56
      Elite Commercial REIT GBP (MXNU) 17.10
      EC World Reit (BWCU) 14.45
      UtdHampshReitUSD (ODBU) 13.84
    • Reminder that these yield numbers are based on current prices. This has caused Manulife US REIT and Prime US REIT’s ttm yields to be over 25%.
    • 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 6.79%. (Weighted Average remains similar at 4.36%) 
    • Widened from 6.24% in August 2023. (Weighted Average was 4.40%)

Gearing Ratios Overview

  • Gearing Ratio increased to 37.95%. (Weighted Average: 38.26%)    
    • Increased from 37.80% of August 2023. (Weighted Average: 38.30%)  
    • Gearing Ratios are updated quarterly. All REITs have updated their Gearing Ratios with Q2 results.
    • S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.
  • Highest Gearing Ratio REITs
    • ManulifeReit USD (BTOU) 56.7
      Elite Commercial REIT GBP (MXNU) 46.0
      Prime US Reit USD (OXMU) 42.8
      Suntec Reit (T82U) 42.6
      Lippo Malls Tr (D5IU) 42.1
      UtdHampshReitUSD (ODBU) 42.0

Market Capitalisation Overview

  • Total Singapore REIT Market Capitalisation decreased by 3.97% per month to S$86.57 Billion.
    • Decreased from S$94.03 Billion in August 2023.
  • Biggest Market Capitalisation REITs (S$):
    • Capitaland Int Com Trust (C38U) 11,773.30
      Capitaland Ascendas Reit (A17U) 11,91.01
      Mapletree Log Tr (M44U) 7,662.11
      Mapletree PAC Tr (N2IU) 7,130.95
      Mapletree Ind Tr (ME8U) 6,204.22
      Frasers Log & Com Tr (BUOU) 3,940.88
    • MPACT and MLT swapped places, after no change in the rankings since September 2022.
  • Smallest Market Capitalisation REITs (S$):
    • ManulifeReit USD (BTOU) 128.39
      Lippo Malls Tr (D5IU) 130.85
      Elite Commercial REIT GBP (MXNU) 197.15
      Prime US Reit USD (OXMU) 199.11
      ARA HTrust USD (XZL) 212.39
      EC World Reit (BWCU) 226.75

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 September 2023

Source: https://screener.reitsavvy.com/

 

 

SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 3.47% (increased from 3.05%)
  • US 10 Year: 4.80% (increased from 4.16%)

Summary

The past 2 months have been a bearish month for S-REITs, due to the mass sell in the REIT Sectors due to the spike in 10 years government bond yield and yield spread compression. However, fundamentally the whole Singapore REITs landscape remains extremely undervalued based on the average Price/NAV (at 0.71) value of the S-REITs, with a very attractive DPU yield of 10.44%! (Weighted average yield of 6.92%). Do take note that NAV and DPU are lagging numbers.

 

 

(Source: https://stocks.cafe/kenny/overview)

Weighted Average Yield spread (in reference to the 10-year Singapore government bond yield of 3.47% as of 7th October 2023) narrowed slightly from 4.40% to 4.36%. The Fed Rate has however adjusted its forecast up, expecting to keep its Fed Rate high (5.25% to 5.50% band) for longer until Q2, 2024. This is due to stronger than expected economic performance. If this is true, it will take longer for REITs to recover then initially anticipated.

Technically, FTSE ST REIT Index has broken the Oct 2022’s support and heading towards the next support level at about 600 (Mar 2020’s low). The current sentiment in S-REIT sector is bearish  and oversold. There may be another 10% potential drop from current level based on technical. Investors should pay attention the coming earning release in Oct/Nov to spot the potential bottoming of the S-REIT Sector.

 

 

Kenny Loh is a 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. https://t.me/REITirement

Continue ReadingSingapore REITs Monthly Update (October 8th, 2023)

Is Buying a Refurbished Smartphone a Smart Move for Your Wallet?

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Smartphones have become a big part of our daily lives. We use it to stay in touch with our loved ones,
browse the internet, play mobile games, and even shop online. However, smartphones aren’t cheap. A
lot of the latest models can cost up to thousands of dollars, which is beyond the budgets of many
Singaporeans. Fortunately, you can still find plenty of cheap mobile phones in Singapore that come in
excellent condition.


When searching for an affordable smartphone, you’ll come across a variety of types. You have the
brand-new, inexpensive models that you can get from tech stores, but they might not have enough
storage space or RAM to run the best apps. You also have second-hand options, but pre-owned gadgets
typically don’t come with warranties and aren’t covered by any returns and exchange policies. They may
also come with problems second-hand sellers aren’t willing to disclose. But have you ever considered
getting a refurbished smartphone?


Refurbished smartphones are devices that have been previously owned and used. What makes them
different from second-hand gadgets, however, is that they’ve undergone a thorough inspection, repair,
and cleaning process. With this extra layer of care, refurbished smartphones look, feel, and work like
brand-new. Here are additional reasons why you should consider getting a refurbished device instead of
spending money on a brand-new phone.

It’s Still More Affordable Than Buying Brand-New
Refurbished smartphones are typically priced considerably lower than their brand-new counterparts. As
such, they make excellent options if you want to achieve significant savings without sacrificing quality.
As mentioned earlier, these devices are previously owned. However, they undergo a rigorous
refurbishment process to ensure that they’re in excellent working condition. During this process,
refurbished phones are thoroughly tested to ensure that they perform like new. If faulty components
are detected, they’re immediately replaced. The result is a smartphone that not only costs less but also
has a high level of reliability and functionality.


It Typically Comes with a Warranty and Return Policy
One of the concerns when buying pre-owned electronics is the absence of warranties and guarantees.
Many second-hand gadgets don’t come with these types of protection because they aren’t checked by
the vendor. Conversely, if you choose a refurbished smartphone, you can often enjoy the peace of mind
that comes with a warranty.


Many reputable sellers in Singapore offer warranties on their refurbished phones. These warranties
cover any potential issues that may arise after purchase, ensuring that you are protected in case of
unexpected problems. Additionally, refurbished smartphones often come with a return or replacement
policy. If you’re unsatisfied with the device or encounter any issues within a specified period, you can
return it for a replacement or refund. Make sure to read what’s included in the warranty before
purchasing a refurbished smartphone. This ensures that your gadget is getting the best protection.

It’s Often Unlocked for Greater Freedom and Flexibility

Refurbished smartphones are often sold unlocked. When a phone is unlocked, it means that it’s not tied
to a specific carrier or network. As such, refurbished smartphones can be paired with various mobile
service providers. Thanks to this flexibility, you can choose a mobile carrier and plan that best suits your
needs and budget.


It Uses Up-to-Date Software
Staying up-to-date with the latest software and security is crucial for a seamless smartphone experience.
Thankfully, refurbished smartphones excel in this regard. These devices come with the latest operating
system and software updates to ensure that you have access to the most current features and security
enhancements. As such, you can enjoy the benefits of cutting-edge software without the premium price
tag associated with brand-new models.


You Get to Choose from a Good Selection of Old and New Models
Refurbished smartphones come in a diverse selection of models, including refurbished flagship gadgets.
Whether you’re looking for an older unit that fits your budget or a more advanced device that comes
with the latest features, there’s a good chance you’ll find it in the refurbished market. This wide range of
options allows you to select a smartphone that aligns with your specific requirements and budget.


You’re Lowering Your Environmental Impact
Choosing a refurbished smartphone also makes sense from an eco-friendly perspective. The
refurbishment process gives a second life to devices that might otherwise end up in landfills and
contribute to electronic waste. The process often involves recycling and reusing components, reducing
the demand for new resources required to manufacture brand-new devices. Thus, when you purchase a
refurbished smartphone, you’re actively participating in reducing electronic waste.


If you’re still wondering if buying a refurbished smartphone is a good idea, the answer to that question
is yes. A refurbished smartphone is an excellent option if you’re looking for a practical gadget that
doesn’t break the bank. The biggest advantage you’ll have when buying a refurbished smartphone is the
added layer of quality of control it comes with. Because of this, it’s almost as if you’re buying a brand-
new model without paying full price.

Continue ReadingIs Buying a Refurbished Smartphone a Smart Move for Your Wallet?

Money and Me: S-REITs with China assets, where are the red flags, where’s the silver lining?

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11th September 2023

Money and Me: S-reits with China assets, where are the red flags, where’s the silver lining

Not all S-Reits, with China assets may be in trouble. Which one, which may be protected even from the growing wave e-commerce? The F1 weekend is back in full swing and for owners of hotel properties in Singapore, the F1 Grand Prix can be a very profitable time of year. But is this a pure hospitality play or are there any other sectors that stand to ride this tourism rebound?
Data Reits and US office reits also come into focus as Michelle Martin and Kenny Loh, REIT Specialist and Independent Financial Advisor discuss the S-reit market.

 

 
 

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:

2023

2022

2021

2020

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. https://t.me/REITirement

Continue ReadingMoney and Me: S-REITs with China assets, where are the red flags, where’s the silver lining?