SGX Market Updates

SGX Real Estate 20 Index Began 2017 with Broad-Based Gains


PUBLISHED ON |

10 January 2017

  • All constituents of the SGX Real Estate 20 Index generated positive gains in the first five sessions of 2017; returns of the 20 stocks averaged 3.7%, taking average 12 month total returns to 14.6%.

  • The SGX Real Estate 20 Index makes up one-tenth of the total market capitalisation of all stocks listed on SGX. The Index includes the eight Real Estate plays within the STI, in addition to three of the five stocks that make up the STI Reserve List - Suntec REIT, Mapletree Commercial Trust and Keppel REIT.

  • The average P/B of the 20 constituents is 0.9x. The seven Real Estate Management & Development stocks within the Index average a P/B ratio of 0.7x, whereas the 12 REITs average a P/B ratio of 1.0x. P/B for developers are generally lower because of the risk premium attached to land banks in development compared to completed yielding real estate for REITs.


The SGX Real Estate 20 Index is a free-float, market capitalisation-weighted index made up of the largest and most tradable Real Estate stocks traded on Singapore Exchange (SGX). The SGX Real Estate 20 Index comprises 20 constituents with a combined market capitalization of S$101.9 billion, which is approximately one-tenth of the total market capitalisation of all stocks listed on SGX. More on the Index methodology can be found here.

All the constituents of the SGX Real Estate 20 Index generated positive gains in the first five sessions of 2017– with returns averaging 3.7%, taking their average 12 month total returns to 14.6%. Last year the SGX Real Estate Index generated a 5.5% total return, outperforming the Bloomberg Asia Pacific Real Estate Index by 9.8%.

Together, the 10 largest constituents of the SGX Real Estate 20 Index account for more than 75% of the Index weights. All five of Singapore’s Real Estate stocks in the FTSE Value-Stocks ASEAN Index (click here) are also a part of the SGX Real Estate 20 Index. The constituents of the SGX Real Estate 20 Index are tabled below. To see more details on each stock in SGX StockFacts, click on the stock name.

Name SGX
Code
Weight
%
Market Cap
in S$bln
Total
Return
YTD
%
Total
Return
1 Yr
%
P/B
(x)
Dvd Ind
Yld %
Global Logistic Properties MC0 12.4 11.5 12.3 28.7 0.9 2.4
Hongkong Land Holdings H78 10.9 16.1 8.4 7.3 0.5 2.8
CapitaLand C31 9.8 13.1 2.3 0.6 0.8 2.9
Ascendas REIT A17U 9.3 6.8 4.8 11.1 1.2 6.4
CapitaLand Mall Trust C38U 8.3 7.0 4.2 7.9 1.0 5.6
Suntec REIT T82U 6.4 4.3 1.8 14.9 0.8 6.1
CapitaLand Commercial Trust C61U 5.7 4.5 3.7 23.2 0.9 5.7
City Developments C09 5.7 7.7 2.9 14.6 0.9 0.9
UOL Group U14 5.0 5.0 4.5 8.5 0.6 2.4
Mapletree Commercial Trust N2IU 4.4 4.2 4.3 21.7 1.1 5.7
Mapletree Industrial Trust ME8U 3.5 3.0 0.3 17.3 1.2 6.9
Keppel REIT K71U 3.3 3.5 2.9 22.5 0.7 6.1
Mapletree Greater China Commercial Trust RW0U 2.9 2.7 1.1 17.4 0.8 7.5
Mapletree Logistics Trust M44U 2.7 2.6 1.5 13.0 1.0 7.2
Frasers Centrepoint Trust J69U 1.9 1.8 2.9 13.2 1.0 5.8
Starhill Global REIT P40U 1.9 1.7 3.4 10.4 0.8 6.8
CapitaLand Retail China Trust AU8U 1.7 1.2 2.9 5.7 0.9 7.5
CDL Hospitality Trusts J85 1.6 1.4 3.7 13.6 0.9 6.4
Wing Tai Holdings W05 1.3 1.3 1.9 -0.3 0.4 1.9
Yanlord Land Group Z25 1.3 2.6 3.8 41.6 0.6 1.1
Average 3.7 14.6 0.9 4.9
Sum 101.9

Source: SGX, SGX StockFacts, Bloomberg (data as of 9 January 2017)



Active Index Constituents of 2016

The five stocks of the SGX Real Estate 20 Index with the highest turnover, relative to market capitalisation in 2016 were Ascendas REIT, Global Logistic Properties, CapitaLand Mall Trust, CapitaLand Commercial Trust and CapitaLand. The next in highest turnover, relative to market capitalisation, was Suntec REIT, which also currently maintains the highest free-float capitalisation on the STI’s Reserve List, in addition to being an existing constituent of the MSCI Singapore Index. The other four stocks of the STI Reserve List (published here) are Mapletree Commercial Trust, Keppel REIT, First Resources and Singapore Post.

Valuations and Yields

The Price-to-Book (P/B) ratio is used to compare a stock's market value to its book value. The average P/B of the 20 constituents is 0.9x, while the average indicative dividend yield of the 20 constituents is 4.9%.  The seven Real Estate Management & Development stocks within the Index average a P/B ratio of 0.7x, whereas the 12 REITs average a P/B ratio of 1.0x and the Stapled Trust maintains a P/B ratio of 0.9x.

The P/B ratio is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. The frequency of net asset valuations, additional capital raisings and unit prices are predominant drivers of the P/B ratio. P/B for developers are generally lower because of the risk premium attached to land banks in development compared to completed yielding real estate for REITs.

The (P/B) ratios and yields of the SGX Real Estate 20 Index constituents are tabled above.  To see more details on each stock in SGX StockFacts, click on the stock name.






This article is provided by SGX My Gateway.



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