Singapore REIT Fundamental Analysis Comparison Table – 1 Jan 2019

Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 783.05  to 777.45 (-0.72%) as compared to last post on Singapore REIT Fundamental Comparison Table on Dec 3, 2018.

Currently the index is trading in a down trend channel and testing a Resistance Turned Support at about 774. If this support holds, the REIT index will be moving side way in a consolidation range.

Based on the current chart pattern and trend analysis, the trend for Singapore REIT direction SIDE WAY to DOWN! The REIT index will be capped by the immediate resistance at about 800 which is the 200D SMA resistance and also the round number.

 

Fundamental Analysis of 39 Singapore REITs

The following is the compilation of 39 REITs in Singapore as of Dec 2018 with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. There are currently 39 REITs in Singapore after VIVA Industrial Trust merged into ESR REIT.

 

  • Price/NAV decreases from 0.94 to 0.93 (Singapore Overall REIT sector is under value now).
  • Distribution Yield increases from 7.16% to 7.24% (take note that this is lagging number). About 48.7% of Singapore REITs (19 out of 39) have Distribution Yield > 7%.
  • Gearing Ratio stays at 34.6%.  19 out of 39 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%.
  • The most overvalue REIT is Parkway Life (Price/NAV = 1.52), followed by Keppel DC REIT (Price/NAV = 1.32), Mapletree Industrial Trust (Price/NAV = 1.29) and Ascendas REIT (Price/NAV = 1.25).
  • The most undervalue (base on NAV) is OUE Comm REIT (Price/NAV = 0.52), followed by Fortune REIT (Price/NAV = 0.55), Lippo Malls Indonesia Retail Trust (Price/NAV=0.66), Keppel KBS US REIT (Price/NAV=0.70), Far East Hospitality Trust (Price/NAV = 0.70), Sabana REIT (Price/NAV = 0.75) and Starhill Global REIT (Price/NAV = 0.76).
  • The Highest Distribution Yield (TTM) is Lippo Mall Indonesia Retail Trust (13.96%), followed by Cromwell European REIT (10.64%), Keppel KBS US REIT (9,71%), OUE Comm REIT (9.72%), Sasseur REIT (9.36%), SoilBuild BizREIT (8.99%), EC World REIT (8.86%) and Cache Logistic Trust (8.63%).
  • The Highest Gearing Ratio are Far East HTrust (40.3%) and OUE Comm REIT (41.4%).

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 investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation.

 

  • 1 month increases from 1.63433% to 1.64933%
  • 3 month increases from 1.75908% to 1.76808%
  • 6 month increases from 1.87918% to 1.88533%
  • 12 month increases from 2.06375% to 2.06702%

There were no knee jerk reaction for the FTSE ST REIT Index after the US Fed raised interest rate to 2.5% on Dec 19.

Based on current probability of Fed Rate Monitor, the US interest rate may stay at 2.5%.

 

 

 

Summary

Fundamentally the whole Singapore REITs is under value now.  Overall yield for Singapore REIT is very attractive (average yield of 7.26%) especially for small and mid cap REIT. The last time we have seen Price/NAV = 0.93 and Distribution Yield of more than 7% is back to Dec 2015. You may compare the Singapore REIT Fundamental Comparison Table in Dec 2015 to see the similarity and you should be able to identify some attractive opportunities.

Yield spread (reference to 10 year Singapore government bond) has widened from 4.476% to 5.19%.  DPU yield for a number of small and mid-cap REITs are very attractive  (>8%) at the moment.  Some big cap REITs are also very attractive in terms of valuation and distribution yield. With the widening yield spread and potentially no further interest rate hike, this may be a good news for Singapore REITs in 2019.

Technically, the REIT index is entering into consolidation phase with immediate support at 774. As long as 760 support holds, it may be a good time for more accumulation because the risk premium is very attractive for small and medium cap REITs now. Investors can do some selective shopping when the down trend stop for those REITs.

Watch for the trend reversal for FTSE ST REIT index in 2019!

Happy hunting on Singapore REITs in 2019!

 

See all other relevant  Singapore REITs blog posts here.

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/

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