Singapore REITs Monthly Update (July 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 640.40 to 630.80 (-1.50%) compared to last month’s update. The REIT Index is currently forming a big descending triangle and seems like forming a base close to 620-630 support zone.

  • Short-term direction: Down
  • Medium-term direction: Sideways
  • Long-term direction: Down
  • Immediate Support at 623
  • Immediate Resistance at 20D SMA, followed by 50D SMA

 

FTSE REIT Index Chart (2 years)

 

Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on June 2nd, 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.
  • REITs with yellow highlights have the latest Q1 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.

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 July 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 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 decreased to 0.77 (Weighted Average: 0.77)
    • Decreased from 0.78 in June 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 2.15
    ParkwayLife REIT 1.55
    Keppel DC REIT 1.34
    Mapletree Industrial Tr 1.20
    Capitaland Ascendas REIT 1.16
    AIMS APAC REIT 0.96
    • Only 5 REITs are overvalued now based on Price/NAV value.
  • Most undervalued REITs (based on Price/NAV)
    Prime US REIT 0.19
    Manulife US REIT 0.19
    Keppel Pacific Oak US REIT 0.19
    Lippo Malls Indonesia Retail Trust 0.27
    ARA Hospitality Trust 0.40
    OUE REIT 0.43

Distribution Yields Overview

  • TTM Distribution Yield increased to 8.05%. (Weighted Average increased to 6.63%)    
    • Increased from 7.88% in June 2024. (Weighted Average was 6.51%)
    • 22 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 23.98
    Keppel Pacific Oak US REIT 18.80
    Elite Commercial REIT 12.86
    United Hampshire REIT 12.13
    ARA Hospitality Trust 12.04
    IREIT Global 11.85

    Reminder that these yield numbers are based on current prices. 

    • 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 4.82%. (Weighted Average remained almost the same at 3.93%)     
    • Widened from 4.52% in June 2024. (Weighted Average was 3.92%)
    • 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.

 

Gearing Ratios Overview

  • Gearing Ratio remained at 39.21%. (Weighted Average: 38.26%)
    • Remained at 39.21% in June 2024. (Weighted Average: 38.25%)  
    • Gearing Ratios are updated quarterly. Therefore there are 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 57.2
    Manulife US REIT 56.7
    Prime US REIT 48.1
    ARA Hospitality Trust 44.1
    Lippo Malls Indonesia Retail Trust 43.7
    Keppel Pacific Oak US REIT 43.0

    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 1.85% to S$84.39 Billion.
    • Decreased from S$85.98 Billion in June 2024.
  • Biggest Market Capitalisation REITs (S$m):
    Capitaland Integrated Commercial Trust 13233.50
    Capitaland Ascendas REIT 11169.00
    Mapletree Pan Asia Commercial Trust 6408.66
    Mapletree Logistics Tr 6392.32
    Mapletree Industrial Tr 5981.85
    Frasers Centrepoint Trust 3701.52

    Mapletree Pan Asia Commercial Trust overtook Mapletree Logistics Trust this month in market cap!

  • Smallest Market Capitalisation REITs (S$m):
    Manulife US REIT 115.92
    Elite Commercial REIT 118.33
    Lippo Malls Indonesia Retail Trust 130.83
    Prime US REIT 134.47
    Keppel Pacific Oak US REIT 138.32
    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 June 2024

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

 

 

SG 10 Year Government Bond Yield

  • SG 10 Year: 3.23% (decreased from 3.39%)

 

Summary

The index is currently consolidating within a descending triangle waiting for the breakout with the immediate support zone between 620-630.

S-REIT sector is currently trading close to COVID low, which considered a good entry points again based on the current chart pattern, valuation, DPU yield and projected interest rate movement. Current yield @6.5% with 20-30% upside potential based on fair book valuation.

The cut in US Interest Rate and the drop in US 10 Years Bond Yield would be the key catalysts to kick start the Singapore REIT sectors again. Until that happens, investors need to continue to wait patiently while collecting the dividend. Patience is needed at the moment for REITs investors.

 

US 10 Year Risk Free Rate

 

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 (July 7th, 2024)

Money and Me: Navigating Challenges for Mapletree REITs and REITs related to Changi Business Park

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10 June 2024

Money and Me: Navigating Challenges for Mapletree REITs and REITs related to Changi Business Park

Today, we delve into the outlook for Mapletree REITs amid challenging market conditions and leadership changes. We discuss the recent performance of Mapletree Logistics Trust and Mapletree Panasia Commercial Trust, investors’ punishing responses and recent leadership changes.
Michelle and her guest Kenny Loh also examine the implications of Mapletree Anson’s $775 million sale by MPACT. Then we travel to Singapore’s “CBD of the east” and examine what the emptying of tenants mean for Singapore’s ambitions to become a regional hub for MNC’s and the possible impact of the vacancies at Changi Business Park on S-REITs. Guest: 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: Navigating Challenges for Mapletree REITs and REITs related to Changi Business Park

CNA Money Mind | ETFs (Exchange Traded Funds) vs. Mutual Funds (or Unit Trusts)

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Similarities and Difference between ETF (Exchange Traded Fund) and Mutual Fund (or Unit Trust)

Link (if video embed doesn’t work): Money Mind 2024/2025 – Ep 7 ETFs vs Mutual Funds – mewatch


🏦 Structure:


·      Both ETFs and mutual funds pool money from multiple investors to invest in a diversified portfolio of assets (e.g., stocks, bonds, or commodities).
·      ETFs trade on stock exchanges throughout the day, similar to individual stocks.
·      Mutual funds are priced once daily based on their net asset value (NAV) and can only be bought or sold at the end of the trading day.



👨‍💼Management Style:


·      ETFs are typically passively managed, tracking market indexes or specific sectors. Mutual funds can be actively managed by fund managers who aim to outperform the market.
·      Mutual funds’ performance depends on the expertise of their portfolio managers. ETFs rely on passive tracking of indexes, reducing the need for active management.
·      However, there are actively managed ETFs and index-based mutual funds available as well.



💰Cost and Liquidity:


·      ETFs tend to be more cost-effective due to lower expense ratios and the ability to trade throughout the day. Mutual funds may have higher fees and only allow transactions once daily.
·      On average, mutual funds have a higher minimum investment requirement than ETFs. Some mutual funds have no minimum investment, but typical retail funds require between $500 and $5,000.
·      ETFs have no specific minimum investment requirement.



👍👎 Pros and Cons:


·      ETFs: Pros include liquidity, diversification, and low costs. Cons include potential tracking error and lack of active management.
·      Mutual funds: Pros include professional management and regulatory oversight. Cons include higher fees and less liquidity.

See the interview on CNA’s Money Mind 2024/2025: ETFs vs Mutual Funds
https://lnkd.in/gsrcqnxy


For Investment Portfolio Planning or Investment Portfolio Review, besides ETF and Mutual Funds, stocks and bonds, I am licensed to advise other types of alternative investments such as Private Credit Lending, Trade Financing, Digital Assets, M&A Private Equities, Pre-IPO Private Shares, BTC trackers, Capital Guaranteed Structure Protect, Downside & Cap Upside Indexed UL.

Each investment solutions serve different financial objectives of Wealth Preservation, Wealth Accumulation, Retirement Funding, Regular Passive Income Stream, Legacy or Estate Planning.

Let’s chat over a coffee 🍵!
https://lnkd.in/dmZYJyiS

 

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 ReadingCNA Money Mind | ETFs (Exchange Traded Funds) vs. Mutual Funds (or Unit Trusts)