Join us for Part 2 of our three-part series, “๐๐ง๐ฅ๐จ๐๐ค๐ข๐ง๐ ๐๐ข๐๐ฅ๐: ๐๐๐ฌ๐ญ๐๐ซ๐ข๐ง๐ ๐๐จ๐ฎ๐ซ ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐ข๐ง ๐ ๐๐๐ฐ ๐๐๐ญ๐ ๐๐ซ๐,” in collaboration with PhillipCapital B2B Team. This seminar will focus on tracking interest rate cuts and exploring investment opportunities to secure yields as T-bill rates are expected to drop in the coming months.
I’ll be sharing various investment options in anticipation of further rate cuts in 2025 and how to build a diversified portfolio comprising different asset classes to optimize risk-adjusted returns. We’re excited to have David Z Wang from Helicap as our guest speaker. I call him Mr. 10 Percent, as his fund has consistently delivered around 10% returns over the past few years. Hear from him firsthand on how he and his team achieve such consistent performance.
Join us at Phillip Securities Pte Ltd (PSPL) at 250 North Bridge Road, #06-00 Raffles City, for an insightful event where you can learn how to navigate your portfolio in this new rate era. Our experts will share valuable insights and strategies to help you unlock maximum yield from your investments. Don’t miss out on this opportunity to master your portfolio! See you there.
๐ Date: Oct 21, 2024 (Monday) โฑ๏ธTime:ย 7:00pm to 9:00pm ๐Venue:ย Phillip Securities Pte Ltd (PSPL) 250 North Bridge Road, #06-00 Raffles City
Registration starts at 6:30pm.
๐๐ฉ๐๐๐ค๐๐ซ๐ฌ ๐๐ซ๐จ๐๐ข๐ฅ๐ Kenny Loh, CFPยฎ AEPPยฎ IBFA MBA is a Wealth Advisory Director specializing in holistic investment planning and estate management. He helps clients grow their investment capital and create passive income for retirement. I also facilitate tax-efficient portfolio transfers to beneficiaries, ensuring tax-free capital appreciation and optimized wealth transfer through strategic asset structuring. Additionally, Kenny is also a SGX Academy trainer specializing in S-REIT investing and he presents his view monthly on MoneyFM89.3.
David Wang is the Co-Founder and Group CEO of Helicap, a leading FinTech private investments firm. With over a decade of experience in finance and technology, David has been instrumental in driving innovation and growth in the alternative investment space. Under his leadership, Helicap has emerged as a pioneering platform that connects investors with robust investment opportunities across various asset classes.
Money and Me: Finding attractive S-REITs in a rate cutting environment
The US Federal Reserve’s first rate cut in 4 years is undoubtedly fueling the REIT sector with optimism, with many companies experiencing a huge jump in their share prices lately. And with expectations of further rate cuts from this year and beyond, how should investors be positioning themselves in the REIT sector? How might distribution yields perform in the coming months? And how can you ride this potentially bullish trend before it’s too late? Dan Koh dissects the details with Kenny Loh, REIT Specialist and Independent Financial Advisor as they discuss the valuation of S-REITs today and where you can find attractive opportunities.
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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.
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Listen to his previous market outlook interviews here:
Kenny Loh is an Associate Wealth Advisory Director and REITs Specialist of Singaporeโs 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.
Technical Analysis of FTSE ST REIT Index (FSTAS351020)
FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased from 702.98 to 700.03(-0.32%) compared to last month’s update. Singapore REITs is currently having a pull back within an uptrend channel after a strong rallyover the 2-3 months.ย ย
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Short-term direction: Up
Medium-term direction: Up
Long-term direction: Up
Immediate Support: 50D SMA (690) and 200D SMA (668)
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 REITsย have the latest Q2 2024 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.
FY DPU: If Green, FY DPU for the recent 4 Quarters is higher than that of the preceding 4 Quarters.If Lower, it isRed.
Yield (ttm): Yield, calculated by DPU (trailing twelve months) and Current Price as of October 11th, 2024.
Gearing (%): Leverage Ratio.
Price/NAV: Price to Book Value. Formula: Current Price over Net Asset Value per Unit.
Yield Spread (%):ย REIT yield (ttm) reference to Gov Bond Yields. REITs are referenced to SG Gov Bond Yield.
As of May 2024, all REITs’ Yield Spread will be referenced to SG Gov Bond Yields, regardless of trading currency.
Price/NAV Ratios Overview
Price/NAV increased to 0.91 (Weighted Average: 0.91)
Increased from 0.89 in September 2024.
Singapore Overall REIT sector is slightly undervalued
Most overvalued REITs (based on Price/NAV)
Keppel DC REIT
1.64
ParkwayLife REIT
1.52
Capitaland Ascendas REIT
1.27
Mapletree Industrial Tr
1.21
Mapletree Logistics Tr
1.04
Frasers Centrepoint Trust
1.00
EC World REIT is currently suspended, however at current Price and NAV/Unit values it has a value of 4.67 (N.M)
Most undervalued REITs (based on Price/NAV)
Prime US REIT
0.33
Keppel Pacific Oak US REIT
0.35
Manulife US REIT
0.35
ARA Hospitality Trust
0.36
Lippo Malls Indonesia Retail Trust
0.40
OUE REIT
0.43
Distribution Yields Overview
TTM Distribution Yield decreased to 6.23%. (Weighted Average remained at 5.91%)ย ย ย
Decreased from 6.37% in September 2024. (Weighted Average was 5.91%)
14 of 40 Singapore REITs have ttm distribution yields of above 7%.
Highest Distribution Yield REITs (ttm)
IREIT Global
11.01
ARA Hospitality Trust
10.70
Elite Commercial REIT
9.41
Cromwell European REIT
9.40
EC World REIT
9.24
First REIT
9.04
Reminder that these yield numbers are based on current prices.ย
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 3.40%. (Weighted Average remained similar at 4.01%)ย ย ย
Tightened from 3.76% in September 2024. (Weighted Average was 3.99%)
From May 2024 onwards, all my yield spread measurements are now in relation to SG Gov Bond Yields, no longer a mix with US Gov Bond Yields.
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Gearing Ratios Overview
Gearing Ratio remained at 39.12%.(Weighted Average: 38.28%)
Remained at 39.12% in September 2024. (Weighted Average: 38.28%) ย
Gearing Ratios are updated quarterly. Therefore there were no gearing ratio updates this month.
S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.
Highest Gearing Ratio REITs
EC World REIT
57.9
Manulife US REIT
56.3
Prime US REIT
48.1
Lippo Malls Indonesia Retail Trust
45.0
ARA Hospitality Trust
43.5
Keppel Pacific Oak US REIT
42.7
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 0.11% to S$92.46 Billion.
Decreased from S$92.57 Billion in September 2024.
Biggest Market Capitalisation REITs (S$m):
Capitaland Integrated Commercial Trust
14006.72
Capitaland Ascendas REIT
12267.63
Mapletree Pan Asia Commercial Trust
7570.08
Mapletree Logistics Tr
7122.58
Mapletree Industrial Tr
5981.85
Frasers Logistics & Commercial Trust
4226.20
Smallest Market Capitalisation REITs (S$m):
ARA Hospitality Trust
145.00
Lippo Malls Indonesia Retail Trust
169.33
Elite Commercial REIT
170.23
Manulife US REIT
220.20
EC World REIT
226.76
Prime US REIT
234.13
Disclaimer: The above table is best used for โscreening and shortlisting onlyโ. 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.
Singapore REITs is currently having a pull back within an uptrend channel after a strong rallyover the 2-3 months.ย ย
Fundamentally, the S-REIT sector is trading at an 9% discount to its fair value, with an average trailing twelve-month (TTM) yield of 6.23%. Despite the recent rally, valuations and distribution per unit (DPU) yields remain attractive. For investors who miss to enter the REITs at the market bottom in April and June, the recent pull back presents another opportunities to lock in the current yield at a discounted valuation, while awaiting a potential valuation re-rating in response to the anticipated interest rate cut by the end of 2024.
The expected cut in the U.S. interest rate and the decline in the U.S. 10-year bond yield are key catalysts that could further boost the Singapore REIT sector. According to the current Fed Fund Rate projections from the CME Group, the market expect another 50 basis point cut by end 2024, with a total reduction of about 100 basis pointsย cut from the peak of the interest rate cycle.
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US 10 Year Risk Free Rate
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Kenny Loh is a Wealth Advisory Director and REITs Specialist of Singaporeโs 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. ย You can join my Telegram channelย #REITirement โ SREITย Singapore REIT Market Update and Retirement related news.ย https://t.me/REITirement
