FSTAS8670 has retired. The new FTSE ST REIT index now is FSTAS351020.
Currently the REIT index is trading within a range between 820 and 880. These 2 levels are supported by strong resistance turned support level at 820 and strong resistance at 880.
Direction: Sideway Range Bound until breakout or breakdown from these 2 key levels.
Kenny Loh is a Senior Consultant 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
Happening on the 15th and 22nd May 2021, REITs Symposium is into its 7th edition. Across 2 days, we will unveil the developments and opportunities in the REITs Industry. Gain insights into Singapore REITs, and engage with a panel of speakers which include REIT CEOs. Register for free now!
Technical Analysis of FTSE ST REIT Index (FSTAS8670)
At the point of writing, the chart of FSTAS8670 is not available on multiple charting platforms. However I am able to find another ticker (FSTRE2000) from MarketWatch.
FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased slightly from 859.68 to 865.91 (+0.72%) compared to last month update. Currently the Singapore REIT index is still trading with a range between 816 and 874.
The following is the compilation of 40 Singapore REITs with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio.
Note 1: The Financial Ratio are based on past data and there are lagging indicators.
Note 2: 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.
Note 3: REITs highlighted in blue have been updated with the latest Q1 2021 business updates.
Do sign up for the REIT screener at only ~$8.33 per month! (limited time only). Normal price $120 per year.
Price/NAV increased at 1.04
Was 1.01 in April 2021.
Singapore Overall REIT sector is at about fair value now.
Take note that NAV is adjusted downward for most REITs due to drop in rental income (Property valuation is done using DCF model or comparative model)
TTM Distribution Yield decreased to 5.36%
Decreased from 5.47% in April 2021.
23% of Singapore REITs (9 out of 39) 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 post circuit breaker recovery.
Excluded Eagle Hospitality Trust due to suspension.
Gearing Ratio at 37.53%.
Remained almost the same at 37.44% in April 2021.
Gearing Ratios are updated quarterly.
In general, Singapore REITs sector gearing ratio is healthy but started to increase due to the reduction of the valuation of portfolios and increase in borrowing due to Covid-19.
Most overvalued REITs (based on Price/NAV)
Keppel DC REIT (Price/NAV = 2.28)
Parkway Life REIT (Price/NAV = 2.14)
Mapletree Industrial Trust (Price/NAV = 1.70)
Mapletree Logistics Trust (Price/NAV = 1.53)
Ascendas REIT (Price/NAV = 1.41)
No change from January – April 2021 for top 5 overvalued REITs ranking
Most undervalued REITs (based on Price/NAV)
First REIT (Price/NAV = 0.52)
BHG REIT (Price/NAV = 0.64)
OUE Commercial REIT (Price/NAV = 0.69)
Starhill Global REIT (Price/NAV = 0.69)
Lippo Malls Indonesia Retail Trust (Price/NAV = 0.69)
Suntec REIT (Price/NAV = 0.74)
All 6 REITs were also the top 6 undervalued REITs of April 2021
Highest Distribution Yield REITs (ttm)
First REIT (15.96%)
Prime US REIT (8.02%)
IREIT Global (7.80%)
Manulife REIT (7.42%)
Cromwell European REIT (7.33%)
Soilbuild Business Space REIT (7.33%)
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.
Total Singapore REIT Market Capitalisation = S$108.8 Billion.
Increased from S$107.9 Billion in January 2021.
Biggest Market Capitalisation REITs:
Capitaland Integrated Commercial Trust ($14.18B)
Ascendas REIT ($12.38B)
Mapletree Logistics Trust ($8.48B)
Mapletree Commercial Trust ($7.06B)
Mapletree Industrial Trust ($6.65B)
No change in ranking compared to March and April 2021 update.
Smallest Market Capitalisation REITs:
BHG Retail REIT ($284M)
United Hamsphire REIT ($327M)
First REIT ($392M)
ARA Hospitality Trust ($393M)
Sabana REIT ($442M)
No change in ranking compared to March and April 2021 update.
Eagle Hospitality Trust is currently suspended
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 appropriate investment decisions, sign up for the next REIT Investing Workshop here to learn how to choose fundamentally strong Singapore REITs for long-term investing and passive income generation.
Fundamentally the whole Singapore REITs is slightly overvalued now based on the average Price/NAV value of the S-REITs.. Below is the market cap heat map for the past 1 month.
Yield spread (in reference to 10 year Singapore government bond of 1.551%) continues to tighten from 4.08% to 3.809%. However, the risk premium is still attractive to accumulate Singapore REITs in stages to lock in the current price and to benefit from long-term yield after the recovery. Moving forward, it is expected that DPU will increase due to the recovery of global economy.
Technically the REIT Index is still trading in a sideways consolidation waiting for a breakout (upside bias). Current macro factors such as a low-interest rate environment, aggressive M&A for future DPU growth, and recovery of global economic support the bullish breakout.
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.
I have been invited as one of the panelists of the upcoming REITs Symposium 2021 event to share about “The Megatrends Impacting S-REITs” on May 22, 2021. You can check the rest of the program of REITs Symposium here.
Kenny Loh is a Senior Consultant 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
Despite the Covid-19 pandemic significantly impacting REIT prices, some REITs have rebounded to close to their 5 years Price/NAV high. In this article we will be discussing the 5 S-REITs trading at close to their 5 years high, in terms of Price/NAV, at the time of writing (14 April 2021).
Do note that despite being at their 5 years high (in terms of Price/NAV) this does not mean that the REIT is overvalued. A REIT can be undervalued (<1 Price/NAV) but still be trading at an all-time high. All data is taken from the StocksCafe REIT screener at the time of writing.
5 REITs at their 5 years Price/NAV high
Below are the 5 REITs trading at their 5 years high.
Top 5 S-REITs trading at their 5 years high in terms of Price/NAV. Data as of 14th April 2021. Eagle Hospitality Trust values not meaningful due to its NAV drop from 80.87 US cents in Q2 2020 to 17.06 US cents in Q3 2020.
REIT Price/NAV Graph and Portfolio Overview
Below are the overview of the REITs. Do note that the NAV value changes every quarter/semi-annually, depending on the data provided by the individual REITs in their results release.
ARA Logos Logistics Trust is a REIT comprising of 100% Industrial and Logistics Properties. It has 27 logistics warehouse properties, with 10 in Singapore and the remaining 17 in Australia. It has a total portfolio valuation of S$1,281 million.
Keppel REIT comprises of interests in ten Grade A commercial office assets with 3 located in Singapore (4 after Keppel Bay Tower acquisition), 6 in Australia (Sydney, Melbourne, Brisbane and Perth) and 1 in Seoul, South Korea. It has a total portfolio valuation of S$8,861 million, the largest in this comparison.
Lendlease Global Commercial REIT comprises of a leasehold interest in one retail property in Singapore (313 Somerset) and three freehold office properties located in Milan, Italy. It has a total portfolio valuation of S$1,452 million.
Sabana REIT has a portfolio of 18 industrial buildings located entirely in Singapore. They are divided into 4 categories, namely high-tech industrial, chemical warehouse & logistics, warehouse & logistics, and general industrial. It has a total portfolio valuation of S$840.1 million, the smallest in this comparison.
ParkwayLife REIT is Asia’s largest listed healthcare REIT, with 53 properties. It comprises of 3 Hospitals in Singapore, 1 Medical Office Building in Kuala Lumpur, Malaysia, and the remaining in Japan as Nursing Homes. has a total portfolio valuation of S$2,002 million.
Fundamental Ratios
Funamental Ratio comparison between the 5 REITs. Information taken from the StocksCafe REIT screener, using its comparison feature. Values taken on 14th April 2021.
The above table shows the corresponding fundamental ratios of the 5 REITs. Some observations that can be made are shown below:
Yield (ttm): The yield of the 5 REITs are diverse, ranging from 3.33% up to 7.05%.
Gearing: The Gearing ratios of the REITs range from 33.5% to 39%. One thing that is worth observing is that these 5 REITs, that are trading at close to their 5 years high, none of them have gearing ratios of above 39%.
Price/NAV: Despite trading at close to their 5 years high, Keppel REIT, Lendlease REIT and Sabana REIT are slightly undervalued.
Some of you might wonder how is Sabana REIT trading at close to its 5 years high in Price/NAV, despite it dropping in price over the past 5 years. The chart below shows Sabana REIT’s price over 5 years.
This is because the Net Asset Value (NAV) of Sabana REIT has been dropping over the past 5 years as well. In layman terms, NAV = (Assets – Liabilities) / Total no. of shares. In Q1 2015, each share’s net asset value is S$1.06, but in Q4 2020, it is only S$0.51.
Lease Management
Lease Management comparison between the 5 REITs. Information taken from the StocksCafe REIT screener. Values taken on 14th April 2021.
The above table shows the corresponding lease management values of the 5 REITs. Some observations that can be made are shown below:
No. of Properties: ParkwayLife REIT has the most no. of properties, with 54. Sabana REIT is the only REIT in this comparison with a portfolio wholly in Singapore.
Occupancy Rate: Sabana REIT has noticeably a lower occupancy rate than the other 4 REITs, at 76.5%.
Weighted Average Lease Expiry (WALE): The 2 Industrial/Logistics REITs have lower WALEs at 2.8 years and 3.1 years respectively. The other 3 REITs in the other sectors have WALEs all above 4.9 years.
Property Portfolio Value: Keppel REIT has the largest Portfolio value by a large margin at S$8.86 billion.
Debt Management
Debt Management comparison between the 5 REITs. Information taken from the StocksCafe REIT screener. Values taken on 14th April 2021.
The above table shows the corresponding lease management values of the 5 REITs. Some observations that can be made are shown below:
Weighted Average Debt Maturity (WADM): Sabana REIT has the lowest WADM of only 1.2 years, while the other 4 REITs have a WADM of about 3 years.
Interest Cost/Cost of Debt: Lendlease REIT and ParkwayLife REIT have a very low Cost of Debt of less than 0.9%. The other 3 REITs have Cost of Debts hovering around 2 to 3%.
Interest Coverage Ratio: Lendlease REIT and ParkwayLife REIT have considerably higher ICRs with 8.5 and 18.1 respectively. The other 3 REITs have an ICR of around 3 to 4.
Unsecured Borrowings: All of Sabana REITs borrowings are secured.
Want to invest in Singapore REITs but don’t know how to start? Or not happy with your current investment portfolio? Contact Kenny here at kennyloh@fapl.sg.
Kenny Loh is a Senior Consultant 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 an invited speaker of REITs Symposium and Invest Fair. Kenny Loh also offers REIT Portfolio Advisory for a fee. Do contact him at kennyloh@fapl.sg
