Singapore REITs - OCBC Investment 2023-11-15: Climbing The “Higher For Longer” Wall Of Worry

• The S-REITs sector endured a tumultuous period in Oct 2023, correcting 6.9% before finding some reprieve in early Nov 2023 as S-REITs share prices rebounded due to weak US payrolls data for the month of Oct 2023 and uptick in US unemployment rates which provided a signal that the Federal Reserve’s (Fed) rate hikes are likely now over.
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3Q23/9M23 S-REITs DPU performance remained subdued as expected

• During the recently concluded 3Q23/9M23 earnings season, out of the 8 S-REITs under our coverage which reported distribution per unit (DPU) data, 7 declared lower y-o-y DPU. The average and median DPU growth came in at -4.7% and -3.6% y-o-y respectively, for the reporting period. However, the lacklustre performance did not come as a surprise, as all these S-REITs’ results met our expectations.

S-REITs reports:

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• CapitaLand Ascendas REIT - OCBC Investment 2023-10-31: Look Beyond The Noise.
• CapitaLand Ascott Trust - OCBC Investment 2023-10-31: Jet Set.
• CapitaLand China Trust - OCBC Investment 2023-10-28: Playing The Long Game.
• CapitaLand Integrated Commercial Trust - OCBC Investment 2023-10-27: Healthy Operating Metrics But Higher Gearing Leaves Little Comfort.
• First REIT - OCBC Investment 2023-11-02: Stable & Defensive.
• Frasers Centrepoint Trust - OCBC Investment 2023-10-27: Ticking The Right Boxes.
• Frasers Logistics & Commercial Trust - OCBC Investment 2023-11-03: A New Dawn Awaits.
• Keppel DC REIT - OCBC Investment 2023-10-17: Still Awaiting Acquisitions As Higher Finance Costs Bite.
• Keppel Infrastructure Trust - OCBC Investment 2023-11-03: An Unexpected Gift.
• Keppel REIT - OCBC Investment 2023-10-18: Improved Occupancy But Softer Market Rental Outlook.
• Mapletree Industrial Trust - OCBC Investment 2023-10-27: Improvement In Most Key Metrics Though DPU Fell Slightly.
• Mapletree Logistics Trust - OCBC Investment 2023-10-25: Eking Out Positive DPU Growth.
• Mapletree Pan Asia Commercial Trust - OCBC Investment 2023-10-30: Weaker DPU Growth But Not Unexpected.
• NetLink NBN Trust - OCBC Investment 2023-11-07: Hopeful To Conclude The Pricing Review Soon.
• Starhill Global REIT - OCBC Investment 2023-11-02: Relatively Stable Metrics.
• Suntec REIT - OCBC Investment 2023-10-23: Continued Divergence Between Operational & DPU Performance.

Adjustment to DPU forecasts

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-11-15 SGinvestors.io

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