Singapore REITs Monthly Update (April 7th, 2024)

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Technical Analysis of FTSE ST REIT Index (FSTAS351020)


FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased from 653.16 to 666.29 (2.01%) compared to last month’s update. The REIT index is now trading in a sideways, with the 50D SMA (666) being the immediate resistance.

  • Short-term direction: Sideways
  • Medium-term direction: Down
  • Long-term direction: Down
  • Immediate Support at 20D SMA
  • Immediate Resistance at 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 March 3rd, 2024.

 

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 have the latest Q4 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 April 5th, 2024.
  • 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 increased to 0.80 (Weighted Average: 0.80)
    • Increased from 0.79 in March 2024.
    • Singapore Overall REIT sector is undervalued now.
    • Price/NAV increased due to NAV trending downwards from the latest Q4 2023 update.
  • Most overvalued REITs (based on Price/NAV)
    • EC World REIT 2.33
      ParkwayLife REIT 1.50
      Keppel DC REIT 1.29
      Capitaland Ascendas REIT 1.26
      Mapletree Industrial Tr 1.25
      Mapletree Logistics Tr 1.06
    • Only 6 REITs are overvalued now based on Price/NAV value.
    • EC World REIT has its NAV/Unit dropped from 0.75 to 0.12 as of the latest update. This caused its Price/NAV to skyrocket to 2.33. Also it is currently suspended.
  • Most undervalued REITs (based on Price/NAV)
    • Prime US REIT 0.21
      Keppel Pacific Oak US REIT 0.22
      Manulife US REIT 0.22
      Lippo Malls Indonesia Retail Trust 0.23
      ARA Hospitality Trust 0.39
      OUE REIT 0.46

 

Distribution Yields Overview

  • TTM Distribution Yield decreased to 7.75%. (Weighted Average remained at 6.32%)  
    • Decreased from 7.96% in March 2024. (Weighted Average was 6.32%)
    • 18 of 40 Singapore REITs have ttm 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.
    • 8 REITs have a ttm yield of over 10%!
  • Highest Distribution Yield REITs (ttm)
    • Prime US REIT 21.17
      Keppel Pacific Oak US REIT 16.45
      Elite Commercial REIT 13.68
      Daiwa House Logistics Trust 13.38
      ARA Hospitality Trust 12.04
      United Hampshire REIT 10.76
    • Reminder that these yield numbers are based on current prices. This has caused Prime US REIT’s and Keppel Pacific Oak REIT’s ttm yields to be over 25%, despite the distribution cuts/halts.
    • 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 4.38%. (Weighted Average remained almost the same at 3.90%)     
    • Tightened from 4.69% in March 2024. (Weighted Average was 3.91%)

 

Gearing Ratios Overview

  • Gearing Ratio remained at 38.76%. (Weighted Average: 37.90%)    
    • Remained 38.76% of March 2024. (Weighted Average: 37.90%)  
    • Gearing Ratios are updated quarterly.
    • S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.
  • Highest Gearing Ratio REITs
    • EC World REIT 58.3
      Manulife US REIT 58.3
      Prime US REIT 48.4
      Lippo Malls Indonesia Retail Trust 44.3
      Keppel Pacific Oak US REIT 43.2
      Suntec REIT 42.3
    • MUST and EC World REIT’s gearing ratio has exceeded MAS’s gearing limit of 50%. However the aggregate leverage limit is not considered to be breached if exceeding the limit is due to circumstances beyond the control of the REIT Manager.

Market Capitalisation Overview

  • Total Singapore REIT Market Capitalisation increased by 1.98% to S$89.22 Billion.
    • Decreased from S$87.49 Billion in March 2024.
  • Biggest Market Capitalisation REITs (S$):
    • Capitaland Integrated Commercial Trust 13100.50
      Capitaland Ascendas REIT 12088.80
      Mapletree Logistics Tr 7405.30
      Mapletree Pan Asia Commercial Trust 7035.00
      Mapletree Industrial Tr 6565.60
      Frasers Logistics & Commercial Trust 3964.40
    • There are no change in the rankings since November 2022.
  • Smallest Market Capitalisation REITs (S$):
    • Lippo Malls Indonesia Retail Trust 100.10
      Elite Commercial REIT 120.74
      Manulife US REIT 136.16
      Prime US REIT 152.32
      Keppel Pacific Oak US REIT 158.08
      ARA Hospitality Trust 164.79

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, scroll down for more information on the REITs courses.

 

Top 20 Best Performers of March 2024


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

 

 

SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 3.22% (increased from 3.11%)
  • US 10 Year: 4.40% (increased from 4.18%)

 

Summary


The past month was finally a slightly bullish month for S-REITs. This is despite the slight increase in SG/US 10 Years Gov Bond Yields. Fundamentally, the whole Singapore REITs landscape remains undervalued based on the average Price/NAV (at 0.80) value of the S-REITs, with still a very attractive DPU yield of 7.75%! (Weighted average yield of 6.32%). Do take note that NAV and DPU are lagging numbers.

Weighted Average Yield spread (in reference to the 10-year Singapore government bond yield of 3.22% as of April 7th 2024) remained almost the same from 3.91% to 3.90%. Based on the CME group’s interest rate futures, there will be a high possibility of rate cut of between 100-150 bps by end of 2024.

 

 

Trends and Predictions for Singapore REITs 2024


Join us for an enlightening webinar where we delve into the intricate world of Real Estate Investment Trusts (REITs) in Singapore against the backdrop of interest rate movements. Kenny Loh, a Singapore REIT Specialist and Independent Financial Advisor, will meticulously analyse current market trends and offer valuable insights into the potential risks and opportunities that lie ahead for S-REITs in 2024.

Key Topics Covered:

  • Impact of Interest Rate Movements on Singapore REITs Performance
  • Navigating Interest Rate Fluctuations
  • Identifying Emerging Risks and Seizing Opportunities in REITs Sector
  • Actionable Insights for Portfolio Positioning
  • Strategic Success Amidst Interest Rate Scenarios

 

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 (April 7th, 2024)

Singapore REITs Monthly Update (March 3rd, 2024)

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Technical Analysis of FTSE ST REIT Index (FSTAS351020)


FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 676.08 to 653.16 (-3.39%) compared to last month’s update. The REIT index is now trading in a downward channel, with the 20D SMA being the immediate resistance. It has broken the previous low in Oct 2022 (support), and has a new support at 611.

  • Short-term direction: Down
  • Medium-term direction: Down
  • Long-term direction: Down
  • Immediate Support at 611 (previous low in Oct 2023)
  • Immediate Resistance at 20D SMA, followed by 200D 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 February 10th, 2024.

 

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 have the latest Q4 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 March 1st, 2024.
  • 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 increased to 0.79 (Weighted Average: 0.79)
    • Increased from 0.75 in February 2024.
    • Singapore Overall REIT sector is undervalued now.
    • Price/NAV increased due to NAV trending downwards from the latest Q4 2023 update.
  • Most overvalued REITs (based on Price/NAV)
    • EC World REIT 2.33
      ParkwayLife REIT 1.51
      Keppel DC REIT 1.26
      Capitaland Ascendas REIT 1.24
      Mapletree Industrial Tr 1.22
      Mapletree Logistics Tr 1.04
    • Only 6 REITs are overvalued now based on Price/NAV value.
    • EC World REIT has its NAV/Unit dropped from 0.75 to 0.12 as of the latest update. This caused its Price/NAV to skyrocket to 2.33.
  • Most undervalued REITs (based on Price/NAV)
    • Manulife US REIT 0.17
      Keppel Pacific Oak US REIT 0.18
      Prime US REIT 0.19
      Lippo Malls Indonesia Retail Trust 0.27
      ARA Hospitality Trust 0.38
      OUE REIT 0.44

 

Distribution Yields Overview

  • TTM Distribution Yield decreased to 7.96%. (Weighted Average is 6.45%)    
    • Decreased from 8.21% in February 2024. (Weighted Average was 6.32%)
    • 19 of 40 Singapore REITs have ttm 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.
    • 7 REITs have a ttm yield of over 10%!
  • Highest Distribution Yield REITs (ttm)
    • Prime US REIT 23.77
      Keppel Pacific Oak US REIT 19.69
      Elite Commercial REIT 13.68
      ARA Hospitality Trust 12.25
      Daiwa House Logistics Trust 12.23
      Cromwell European REIT 10.97
    • Reminder that these yield numbers are based on current prices. This has caused Prime US REIT’s and Keppel Pacific Oak REIT’s ttm yields to be over 25%, despite the distribution cuts/halts.
    • 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 4.69%. (Weighted Average widened slightly to 3.91%)     
    • Tightened from 5.07% in February 2024. (Weighted Average was 3.85%)

 

Gearing Ratios Overview

  • Gearing Ratio increased slightly to 38.76%. (Weighted Average: 37.89%)    
    • Increased from 38.06% of February 2024. (Weighted Average: 37.86%)  
    • Gearing Ratios are updated quarterly.
    • S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.
  • Highest Gearing Ratio REITs
    • EC World REIT 58.3
      Manulife US REIT 58.3
      Prime US REIT 48.4
      Lippo Malls Indonesia Retail Trust 44.3
      Keppel Pacific Oak US REIT 43.2
      Suntec REIT 42.3
    • MUST and EC World REIT’s gearing ratio has exceeded MAS’s gearing limit of 50%. However the aggregate leverage limit is not considered to be breached if exceeding the limit is due to circumstances beyond the control of the REIT Manager.

Market Capitalisation Overview

  • Total Singapore REIT Market Capitalisation decreased by 2.87% to S$87.49 Billion.
    • Decreased from S$90.08 Billion in February 2024.
  • Biggest Market Capitalisation REITs (S$):
    • Capitaland Integrated Commercial Trust 12701.50
      Capitaland Ascendas REIT 11913.60
      Mapletree Logistics Tr 7256.20
      Mapletree Pan Asia Commercial Trust 6930.00
      Mapletree Industrial Tr 6395.80
      Frasers Logistics & Commercial Trust 3852.20
    • There are no change in the rankings since November 2022.
  • Smallest Market Capitalisation REITs (S$):
    • Manulife US REIT 104.88
      Lippo Malls Indonesia Retail Trust 115.50
      Elite Commercial REIT 120.74
      Keppel Pacific Oak US REIT 132.08
      Prime US REIT 135.66
      ARA Hospitality Trust 161.90

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, scroll down for more information on the REITs courses.

Top 20 Worst Performers of February 2024


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

SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 3.11% (increased from 2.98%)
  • US 10 Year: 4.18% (remained at 4.18%)

 

Summary


The past month was a bearish month for S-REITs again. This can be possibly caused by the continued increase in SG/US 10 Years Gov Bond Yields (highly inversely correlated with FTSE ST REIT Index in 2023) and poor earnings release by most of the REITs (which DPU was expected to drop YoY due to the full impact of interest rate hikes). Fundamentally, the whole Singapore REITs landscape remains undervalued based on the average Price/NAV (at 0.79) value of the S-REITs, with still a very attractive DPU yield of 7.96%! (Weighted average yield of 6.45%). Do take note that NAV and DPU are lagging numbers.

The earnings reporting season has ended for Q4 2023. The following are the summary q-o-q / h-o-h results for the S-REITs:

10 REITs reported an increase in DPU,

19 REITs reported a decrease in DPU,

6 REITs reported no change in DPU.

 

Weighted Average Yield spread (in reference to the 10-year Singapore government bond yield of 3.11% as of 10th February 2023) widened slightly from 3.86% to 3.91%. Based on the CME group’s interest rate futures, there will be a high possibility of rate cut of between 100-150 bps by end of 2024.

Technically the REIT Index has broken the previous support of about 665, and now has a new support at 611 (previous low in Oct 2022).

Trends and Predictions for Singapore REITs 2024


Join us for an enlightening webinar where we delve into the intricate world of Real Estate Investment Trusts (REITs) in Singapore against the backdrop of interest rate movements. Kenny Loh, a Singapore REIT Specialist and Independent Financial Advisor, will meticulously analyse current market trends and offer valuable insights into the potential risks and opportunities that lie ahead for S-REITs in 2024.

Key Topics Covered:

  • Impact of Interest Rate Movements on Singapore REITs Performance
  • Navigating Interest Rate Fluctuations
  • Identifying Emerging Risks and Seizing Opportunities in REITs Sector
  • Actionable Insights for Portfolio Positioning
  • Strategic Success Amidst Interest Rate Scenarios

 

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 (March 3rd, 2024)

Money and Me: US Office Reits – the immediate outlook is bleak but there are opportunities for investors

  • Post author:

16th February 2024

Money and Me: US Office Reits – the immediate outlook is bleak but there are opportunities for investors

We take a closer look at the deterioration of the pure play US office Reit sector. With the US Fed interest rate path as vague as ever, which companies are likely to struggle and can investors find attractive opportunities? Michelle Martin asks Kenny Loh, REIT Specialist and Independent Financial Advisor.

 

 
 

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:

2024

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: US Office Reits – the immediate outlook is bleak but there are opportunities for investors