Singapore REIT Fundamental Analysis Comparison Table Jan 24 – 2021

Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased from 854.19 to 877.59 (+2.74%) compared to last month update. Currently the Singapore REIT index has started an uptrend after broke the resistance of about 852 and 874.

  • As for now, Short term direction: Up trend. (All 20D, 50D and 200D SMA have started trending up)
  • Immediate Support at 874 (Resistance turned Support)
  • Immediate Resistance at 900, followed by 940.

Previous chart on FTSE ST REIT index can be found in the last post Singapore REIT Fundamental Comparison Table on Dec 20, 2020.

Fundamental Analysis of 40 Singapore REITs

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 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 the Q4 2020 business updates.
  • Note 4: Capital Mall Trust has merged with Capitaland Commercial Trust and has became Capitaland Integrated Commercial Trust (C38U). Capitaland Commercial Trust is delisted.

(Source: https://stocks.cafe/kenny/advanced)

Do sign up for the REIT screener at only ~$8.33 per month! (limited time only). Normal price $120 per year.

  • Price/NAV increased to 1.01
    • Increased from 0.98 in December 2020
    • Singapore Overall REIT sector is at about fair value now
  • TTM Distribution Yield increased to 5.45%
    • Increased from 5.30% in December 2020
    • After Q3 earning release (and Q4 earnings release for 6 REITs) after factoring in the dividend cut impact caused by COVID-19).
    • About 22.5% of Singapore REITs (9 out of 40) 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.
  • Gearing Ratio at 38.19%. 
    • Increased from 37.63% in December 2020
    • 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.
  • Most overvalued REITs (based on Price/NAV)
    • Keppel DC REIT (Price/NAV = 2.45)
    • Parkway Life (Price/NAV = 2.08)
    • Mapletree Industrial Trust (Price/NAV = 1.70)
    • Mapletree Logistics Trust (Price/NAV = 1.68)
    • Ascendas REIT (Price/NAV = 1.47)
    • No change from December 2020 for top 5 overvalued REITs ranking
  • Most undervalued REITs (based on Price/NAV)
    • Lippo Malls Indonesia Retail Trust (Price/NAV = 0.23)
    • First REIT (Price/NAV = 0.49)
    • Starhill Global REIT (Price/NAV = 0.64)
    • OUE Commercial REIT (Price/NAV = 0.65)
    • ARA Hospitality Trust (Price/NAV = 0.69)
    • BHG REIT (Price/NAV = 0.71)
  • Highest Distribution Yield REITs (ttm)
    • First REIT (16.94%)
    • Lippo Malls Indonesia Retail Trust (12.62%)
    • KepPacOak US REIT (8.75%)
    • Sasseur REIT (7.61%)
    • EC World REIT (7.51%)
    • ARA LOGOS Logistic Trust (7.48%)
    • 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.
  • Highest Gearing Ratio REITs
    • Eagle Hospitality Trust (65.5%) * Filed for Chapter 11 Bankruptcy Protection *
    • First REIT (49%)
    • ARA Hospitality Trust (43%)
    • Lippo Malls Retail Trust (42.5%)
    • ESR REIT (41.6%)
    • Suntec REIT (41.5%)
    • Capitaland Integrated Commercial Trust (40.6%)
    • ARA Logos Logistic Trust (40.5%)
    • OUE Commercial REIT (40.3%)
    • Mapletree NAC Trust (40.1%)
  • Total Singapore REIT Market Capitalisation = S$107.2 Billion.
    • Increased from S$103.5 Billion in December 2020.
  • Biggest Market Capitalisation REITs:
    • Capitaland Integrated Commercial Trust ($14.89B)
    • Ascendas REIT ($11.75B)
    • Mapletree Logistics Trust ($8.35B)
    • Mapletree Commercial Trust ($7.23B)
    • Mapletree Industrial Trust ($6.86B)
  • Smallest Market Capitalisation REITs:
    • Eagle Hospitality Trust ($119M)
    • First REIT ($198M)
    • United Hamsphire REIT ($286M)
    • BHG Retail REIT ($301M)
    • ARA Hospitality Trust ($386M)
    • Sabana REIT ($395M)
  • 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 investing decision, Sign up next REIT Investing Workshop here to learn how to choose a fundamentally strong Singapore REIT for long term investing for passive income generation.

Top 20 Performers of the Month (Source: https://stocks.cafe/kenny/advanced)

SG 10 Year & US 10 Year Government Bond Yield

  • SG 10 Year: 1.004%
  • US 10 Year: 1.09%

Summary

Fundamentally the whole Singapore REITs is close to fair value now based on simple average on the Price/NAV. Below is the market cap heat map for the past 1 month. We can see from here Hospitality sector is taking a breather after a strong run up on the previous month, and other small & medium cap REITs (e.g. Keppel REIT, Cromwell European REIT, ARA Logos Logistic Trust, BHG Retail REIT, Prime US REIT) which are playing catch up now due to cheap valuation.

(Source: https://stocks.cafe/kenny/overview)

Yield spread (reference to 10 year Singapore government bond of 1.004%) widen slightly from 4.407% to 4.449%. However, the risk premium are still attractive to accumulate Singapore REITs in stages to lock in the current price and long term yield after the recovery. Moving forward, it is expected the increase of DPU due to the recovery of global economy.

Technically the REIT Index broke the resistance and started an uptrend. Current macro factors such as 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 on my extensive research and years on Singapore REIT investing experience can approach me separately for REIT Portfolio Consultation.

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 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

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