Singapore REITs Monthly Update (November 10th, 2023)

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Happy Deepavali!

Technical Analysis of FTSE ST REIT Index (FSTAS351020)


FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 646.46 to 641.39 (-0.78%) compared to last month’s update. The REIT index hit the resistance zone at about 660 level after rebounded from 613 level.  Technically the REIT index is still in bearish territory.

  • Short-term direction: Down 
  • Medium-term direction: Down
  • Long-term direction: Down
  • Immediate Support at 600-613 zone (Mar 2020 low)
  • Immediate Resistance at about 660 (horizontal support turned resistance and 50D SMA)

FTSE REIT Index Chart

Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on October 8th, 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.
  • All REITs except Cromwell European REIT have the latest Q3 2023 update values.
  • 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 November 10th, 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 remained at 0.71. (Weighted Average: 0.71)
    • Remained from 0.71 in October 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) 1.51
      Keppel DC Reit (AJBU) 1.31
      Capitaland Ascendas Reit (A17U) 1.16
      Mapletree Ind Tr (ME8U) 1.15
      Mapletree Log Tr (M44U) 1.08
      AIMS APAC Reit (O5RU) 0.92
    • 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)
    • Prime US Reit USD (OXMU) 0.17
      ManulifeReit USD (BTOU) 0.20
      Lippo Malls Tr (D5IU) 0.26
      KepPacOakReitUSD (CMOU) 0.31
      ARA HTrust USD (XZL) 0.35
      EC World Reit (BWCU) 0.40

Distribution Yields Overview

  • TTM Distribution Yield decreased to 9.57%. (Weighted Average is 6.68%)    
    • Decreased from 10.44% in October 2023 (Weighted Average was 6.92%)
    • 20 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.
    • 11 REITs have a ttm yield of over 10%!
  • Highest Distribution Yield REITs (ttm)
    • Prime US Reit USD (OXMU) 42.89
      ManulifeReit USD (BTOU) 27.09
      KepPacOakReitUSD (CMOU) 21.12
      Elite Commercial REIT GBP (MXNU) 15.67
      UtdHampshReitUSD (ODBU) 15.27
      CromwellReit EUR (CWBU) 13.35
    • 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 tightened to 6.24%. (Weighted Average remains similar at 4.40%) 
    • Tightened from 6.79% in October 2023. (Weighted Average was 4.36%)

Gearing Ratios Overview

  • Gearing Ratio increased to 38.08%. (Weighted Average: 38.34%)    
    • Increased from 37.95% of October 2023. (Weighted Average: 38.26%)  
    • 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) 56.0
      Elite Commercial REIT GBP (MXNU) 45.4
      Prime US Reit USD (OXMU) 43.7
      Lippo Malls Tr (D5IU) 43.0
      Suntec Reit (T82U) 42.7
      Capitaland China Tr (AU8U) 42.4

Market Capitalisation Overview

  • Total Singapore REIT Market Capitalisation decreased by 0.67% to S$85.99 Billion.
    • Decreased from S$86.57 Billion in October 2023.
  • Biggest Market Capitalisation REITs (S$):
    • Capitaland Int Com Trust (C38U) 11906.33
      Capitaland Ascendas Reit (A17U) 11810.53
      Mapletree Log Tr (M44U) 7638.88
      Mapletree PAC Tr (N2IU) 6977.57
      Mapletree Ind Tr (ME8U) 6148.66
      Frasers Log & Com Tr (BUOU) 3903.70
    • MPACT and MLT swapped places, after no change in the rankings since September 2022.
  • Smallest Market Capitalisation REITs (S$):
    • Lippo Malls Tr (D5IU) 153.94
      ManulifeReit USD (BTOU) 191.00
      Elite Commercial REIT GBP (MXNU) 196.46
      Prime US Reit USD (OXMU) 206.80
      ARA HTrust USD (XZL) 211.96
      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 October 2023


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

 

 

SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 3.13% (increased from 3.47%)
  • US 10 Year: 4.66% (increased from 4.80%)

Summary


The past month has been an average month for S-REITs, after 2 bearish months and mass selling 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 still a very attractive DPU yield of 9.57%! (Weighted average yield of 6.68%). 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 3.13% as of 10th November 2023) narrowed slightly from 4.36% to 4.40%. 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. 

 

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. 

 

 

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 (November 10th, 2023)

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)

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?