In the first 11 months of 2012, the FTSE ST Real Estate Holding & Development Index and FTSE ST Real Estate Investment Trust Index both outperformed the other sector indices of the FTSE ST Index Series. The year-to-date total return of the two sector indices amounted to 50.7% and 42.8% respectively at the end of November.
The last time these two sectors were the respective sector outperformers was eight years ago, in 2004. Another observation of 2004 is that the Straits Times Index (STI) gained +16.7% over the year. As of the Friday close, the STI had gained +17.4% in the 2012 year-to-date. Nevertheless, there a still three weeks left for the 2012 year which could still see changes to all of the sector performances.
There are generally two types of real estate stocks available to investors. The first is Real Estate stocks, which usually take the form of a developer or investment holding company. The second is Real Estate Investment Trusts, which are not stocks per se, and commonly referred to as REITs. Singapore investors are well served with over 70 counters that are generally made up of either real estate companies or REITs listed on Singapore Exchange (SGX). This provides an element of portfolio flexibility and potential for diversification of risk and return to investors.
The five biggest Real Estate Holding & Development companies listed on SGX are also STI constituents. The full market capitalisation of these five companies ranges from S$19.9 billion to S$7.7 billion. These stocks and their respective price performances are HongKong Land Holdings USD (H78, +48.9%), CapitaLand (C31, +67.0%), Global Logistic Properties (MC0, +56.7%), City Developments (C09, +34.8%) and CapitaMalls Asia (JS8, +73.0%). The next five biggest real estate stocks, in terms of size, with respective price performances in the year thus far are : Keppel Land (K17, +68.5%), UOL Group (U14, +46.0%), United Industrial Corp (U06, +3.7%), Singapore Land (S30, 26.0%) and GuocoLand (F17, +37.5%). These price performances do not include dividend distributions. The indicative dividend yields for the next 12 months of these ten property stocks currently range from 0.7% for City Developments to 5.4% for Keppel Land.
The five biggest REITs and respective year to date price performances are as follows: CapitaMall Trust (C38U, +23.5%), Ascendas REIT (A17U, +30.6%), CapitaCommercial Trust (C61U, +54.5%), Suntec REIT (T82U, +48.8%) and Keppel REIT (K71U, +50.6%). Note that including dividend distributions, derived from rental income, the total return of these five REITS in the year thus far was boosted as follows: CapitaMall Trust (+29.9%) Ascendas REIT (+39.6%), CapitaCommercial Trust (+64.6%), Suntec REIT (+59.9%) and Keppel REIT (+62.8%). The next three biggest REITs are part of the Mapletree Group with total returns in the year thus far as follows: Mapletree Logistics Trust (M44U, +40.0%), Mapletree Industrial Trust (ME8U, +36.5%) and Mapletree Commercial Trust (N2IU, +46.2%). The ninth biggest trust of the REIT sector is CDL Hospitality Trusts (J85, +32.2%), which itself is a stapled security, and followed in size by Frasers Centrepoint Trust (J69U, +46.4%). The indicative dividend yields for the next 12 months of the aforementioned ten trusts currently range from 3.0% for CapitaMall Trust to 6.7% for Mapletree Industrial Trust.
Source: SGX My Gateway
