SGX Market Updates

Industrial REITs generated a total return of +8.2% YTD (STI +8.1%)


PUBLISHED ON |

28 February 2017

  • Industrial REITs in the SGX S-REIT index generated a total return of +8.2 YTD (SGX S-REIT Index +6.0%), similar to the Straits Times Index’s (STI) +8.1%. The sub-industry forms the largest share in the SGX S-REIT index with 8 members and a total weightage of 26.5%.

  • The top three performing Industrial REITs in the YTD are Sabana Shari'ah Compliant Industrial REIT (+18.4%), Ascendas REIT (+11.9%) and Cambridge Industrial Trust (+9.3%). The three plays averaged a year-to-date return of 13.2%.

  • Real Estate Operating Companies and Residential REITs sub-industries in the SGX S-REIT Index have also performed well at +9.0% and +7.0% total return YTD. Though the two sub-industries combined have less than a 6% weight in the SGX S-REIT index with only two companies each.




Industrial REITs generated a total return of +8.2% YTD

Industrial REITs within the SGX S-REIT index were amongst the best performers year-to-date with a market capitalisation weighted total return of 8.2% and 11.5% in the year-to-date and 1 year respectively. The SGX S-REIT index, used as a performance benchmark for Real Estate Investment Trusts (REITs) in Singapore, generated a total return of 6.0% year-to-date.

The top three performing Industrial REITs in the year-to-date are Sabana Shari'ah Compliant Industrial REIT (+18.4%), Ascendas REIT (+11.9%) and Cambridge Industrial Trust (+9.3%) .

The Industrial REIT sub-industry also forms the largest share in the SGX S-REIT index with eight out of 36 members and a total weightage of 26.5%.The table below details the eight Industrial REITs within the SGX S-REIT Index sorted by market cap. To see more details on each stock in SGX StockFacts click on the stock name.

Name SGX Code Market Cap
S$M
Total Return
YTD %
Total Return
1 Yr %
P/B Div Ind
Yld %
Sabana Shari'ah Compliant Industrial REIT M1GU 458 18.4 -12.6 0.6 8.0
Ascendas REIT A17U 7119 11.9 11.2 1.2 6.3
Cambridge Industrial Trust J91U 763 9.3 21.5 0.9 6.9
Mapletree Logistics Trust M44U 2675 6.8 17.8 1.0 7.0
AIMS AMP Capital Industrial REIT O5RU 865 5.2 10.5 0.9 8.2
Frasers Logistics & Industrial Trust BUOU 1379 4.9 N/A 1.0 1.9
Cache Logistics Trust K2LU 738 2.9 4.9 1.1 9.0
Mapletree Industrial Trust ME8U 2992 2.6 14.8 1.2 6.8
Average 8.2 11.5 1.1 6.8

Source: SGX, Bloomberg & SGX StockFacts (data as of 27 February 2017)

Based on S-REITs earnings reports for the October-December 2016 quarter, Industrial REITs generally saw a slight increase in occupancy rates with positive rental reversions. However, rental rates were mixed as business parks rental increased by low single digits on a YoY basis, while factories and warehouses rentals declined. According to some of the Industrial REITs, the business environment in Singapore remains challenging due to global uncertainties and increased in supply of industrial spaces, specifically in Singapore.


Ascendas REIT

Ascendas REIT is the largest Industrial REIT and in fact the largest S-REIT with a market cap of S$7.1billion. The REIT generated a total return of 11.2% over the past 1 year with a dividend yield of 6.3%. It invests in properties in both Australia and Singapore, with a portfolio containing 28 properties in Australia and 103 properties in Singapore. In its most recent earnings release, the company reported its earnings for the third quarter of its Financial Year 16/17 which is from 1 October 2016 to 31 December 2016.

The REIT reported a Distribution Per Unit (DPU) of S$3.993 cents for the quarter which is 1.2% higher when compared to the same quarter in the preceding year. Net Property Income (NPI) is also up by 9.0% to S$155 million when compared to the previous year. For more financial information about  Ascendas REIT, please click here.

Outlook from management in press release (Source: Ascendas REIT )

  • With 9.8% vacancy in the portfolio, there could be potential upside in NPI when these spaces are leased in the future.
  • Management exports a stable performance for the Financial Year ending 31 March 2017 despite the challenging business environment and uncertainties surrounding the global economy.

Cambridge Industrial Trust

Cambridge Industrial Trust is one of the top performers in the Index with a year-to-date total return of 18.4%. It is also the top performer in the Index over the past year with a 1 year total return of 21.5%. The REIT currently only invests in Singapore, with 49 properties in its portfolio. In its most recent earnings release, the company reported its earnings for the year ended 2016.

The REIT reported a DPU of S$4.173 cents which was down 12.9% when compared to the preceding year. It also reported an NPI of S$82 million in its most recent earnings release for FY 2016, which was 4.5% lower than FY 2015. For more information about the earnings releases of Cambridge Industrial Trust, please click here.

Outlook from management in press release (Source: Cambridge Industrial Trust )

  • No major refinancing needs until second half of 2018 provides flexibility and certainty in an uncertain interest rate environment.
  • e-Shang Redwood has, through its subsidiary e-Shang Infinity Cayman, completed the acquisition of an aggregate indirect 80% stake in Cambridge Industrial Trust management becoming a new majority shareholder.

Sabana Shari’ah Compliant Industrial REIT

On 7 Feb 2017, Sabana Shari’ah Compliant Industrial REIT has received a requisition letter from 66 shareholders to convene an extraordinary general meeting (EGM) surrounding issues on the performance of its REIT managers. The stock hit an all-time low of S$0.34 on 6 Jan 2017 and has since rebounded to S$0.435 based on last week’s close to generate a year-to-date total return of 18.4%.

On 24 February 2017, the REIT announced that it has appointed Morgan Stanley Asia (Singapore) as its financial adviser for a strategic review, in response to the EGM. For more information of the latest press releases and financial information of Sabana Shari’ah Compliant Industrial REIT, please click here.

In its most recent earnings release for the year ended 2016, the company reported a NPI of S$57 million which was a 20% decrease from the previous year, and a DPU of S$4.17 cents which was a 30.4% decrease from the year before.

Outlook from management in press release (Source: Sabana Shari’ah Compliant Industrial REIT )

  • The Group reported a deficit in total return after taxation and before distribution for the year ended 2016.
  • Despite the subdued outlook for the industrial property market, management will stay proactive in maintaining the occupancy rates of its properties.


Real Estate Operating Companies and Residential REITs also amongst Best Performers

Real Estate Operating Companies and Residential REITs are also amongst the best performing sub-industries of the Index with a market capitalisation weighted total return of 9.0% and 7.0% respectively. These sub-industries are classified by the Global Industry Classification Standards (GICS®).


Market Cap Weighted Total Return Year-To-Date

SREIT Market Cap Weighted Return YTD

Source: SGX, Bloomberg & SGX StockFacts (data as of 27 February 2017)



Real Estate Operating Companies

Real Estate Operating Companies was the best performing sub-industry in the year-to-date, consisting of Ascendas India Trust and Croesus Retail Trust. These two plays generated market capitalisation-weighted average total returns of 9.0% and 31.2% in the year to date and 1 year respectively with an average dividend yield of 6.7%.

The table below details the constituents of the Real Estate Operating Companies in the SGX S-REIT Index, sorted by market capitalisation. To see more details on each stock in SGX StockFacts click on the stock name.

Name SGX Code Market Cap
S$M
Total Return
YTD %
Total Return
1 Yr %
P/B Div Ind
Yld %
Ascendas India Trust CY6U 1042 10.8 38.2 1.6 4.9
Croesus Retail Trust S6NU 635 6.1 19.7 0.9 8.5
Average 9.0 31.2 1.3 6.7

Source: SGX, Bloomberg & SGX StockFacts (data as of 27 February 2017)



Residential REITs

The third best performing sub-industry in the year-to-date is Residential REITs consisting of Ascott Residence Trust and Saizen REIT. These two plays generated market capitalisation-weighted average total returns of 7.0% and 13.6% in the year to date and 1 year respectively with an average dividend yield of 7.5% .

The table below details the constituents of the Residential REITs segment in the SGX S-REIT Index, sorted by market capitalisation. To see more details on each stock in SGX StockFacts click on the stock name.

Name SGX Code Market Cap
S$M
Total Return
YTD %
Total Return
1 Yr %
P/B Div Ind
Yld %
Ascott Residence Trust A68U 1943 7.1 13.4 0.9 7.5
Saizen REIT T8JU 16 2.0 42.2 1.8 N/A
Average 7.0 13.6 0.9 7.5

Source: SGX, Bloomberg & SGX StockFacts (data as of 27 February 2017)



SGX S-REITs Index

The SGX S-REIT Index is a free-float market capitalisation-weighted index that measures the performance of Real Estate Investment Trusts (REITs) in Singapore. REITs raise capital to purchase primarily real estate assets, usually with a view to generating income for unit holders of the fund. It allows individual investors to access real property assets and share the benefits and risks of owning a portfolio of properties, which typically distribute income at regular intervals.

Currently, there are 36 constituents in the SGX S-REIT index, containing eight property trusts and 28 REITs. Within the index, there are 10 different sub industries classified by GICS with a combined market capitalisation of S$68 billion. Industrial REITs currently have the most constituents within its segment with eight members, and a combined market capitalisation of S$17billion. Industrial REITs are companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of industrial assets, which include warehouses and distribution properties .






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