SGX Market Updates

9 SGX Listed Trusts Raised S$2.7 Billion via Rights Issues in Last 18 Months


PUBLISHED ON |

30 October 2018

  • There are 34 REITs, 6 stapled trusts and 3 property trusts listed on SGX. The sector has a combined market capitalisation of close to S$100 billion, with Retail, Industrial and Office REITs making up the three largest segments.

  • Between January 2017 and June 2018, eight REITs and one stapled trust have raised a total of S$2.7 billion in funds through rights issues, mostly to finance new property investments. They are: Frasers Logistics, Manulife REIT, ESR-REIT, CCT, Mapletree Logistics, Cache, CDL, Ascott Residence, and Sabana REIT.

  • In 3Q18, these nine trusts have registered a total return of +1.9%. This brings their 12M and 3Y total returns to -3.8% and +15.0% respectively. They have also averaged an aggregate leverage ratio of 35.6%, a dividend indicated yield of 6.9% and a price-to-book ratio of 0.9.




There are 34 Real Estate Investment Trusts (REITs), 6 stapled trusts and 3 property trusts listed on SGX. The sector has a combined market capitalisation of close to S$100 billion, with Retail, Industrial and Office REITs making up the largest segments.

Between January 2017 and June 2018, eight REITs and one stapled trust have raised a total of S$2.7 billion in funding through rights issues, mostly to finance new property investments. The nine trusts are: Frasers Logistics & Industrial Trust, Manulife US REIT, ESR-REIT, CapitaLand Commercial Trust, Mapletree Logistics Trust, Cache Logistics Trust, CDL Hospitality Trusts, Ascott Residence Trust, and Sabana Shari'ah Compliant Industrial REIT.

In particular, Manulife raised US$197.2 million via a rights issue to finance the purchase of two office properties in Washington DC and Georgia in the US, while Frasers Logistics raised S$147.1 million via a rights issue to fund the purchase of 21 European logistics properties in the Netherlands and Germany.

The table below details the nine trusts and their rights issues, sorted by date.


Name Rights Shares Subscriptio Price Currency Amount Raised
(S$m)
Ratio Listing Date
Frasers Logistics & Industrial Trust 152,153,437 0.967 SGD 147 1 right for 10 units held Jun-18
Manulife US REIT 227,935,981 0.865 USD 268 22 rights for 100 units held Jun-18
ESR-REIT 262,849,614 0.540 SGD 142 199 rights for 1,000 units held Mar-18
CapitaLand Commercial Trust ~ 513,540,228 1.363 SGD 700 166 rights for 1000 units held Oct-17
Manulife US REIT 299,288,423 0.695 USD 283 41 rights for 100 units held Oct-17
Mapletree Logistics Trust 250,187,292 1.145 SGD 286 1 right for 10 units held Oct-17
Cache Logistics Trust 162,565,716 0.632 SGD 103 18 rights for 100 units held Oct-17
CDL Hospitality Trusts ^ 199,545,741 1.280 SGD 255 20 rights for 100 units held Aug-17
Ascott Residence Trust 481,688,010 0.919 SGD 443 29 rights for 100 units held Apr-17
Sabana Shari'ah Compliant Industrial REIT 310,712,244 0.258 SGD 80 42 rights for 100 units held Jan-17

Source: SGX
~ Straits Times Index (STI) constituent
^ Stapled trust




In the July-September 2018 quarter, these nine trusts have registered a total return of +1.9%. This brings their 12-month and three-year total returns to -3.8% and +15.0% respectively. They have also averaged an aggregate leverage ratio of 35.6%, a dividend indicated yield of 6.9% and a price-to-book ratio of 0.9.

The tables below detail the nine trusts and their total returns, sorted by market capitalisation. Click on the stock name to view its profile in StockFacts.



Name SGX Code Market Cap
S$m
Total
Return
3Q18
(%)
Total
Return
1Y
(%)
Total
Return
3Y
(%)
CapitaLand Commercial Trust C61U 6,476.7 7.7 6.6 45.0
Mapletree Logistics Trust M44U 4,383.2 2.0 0.6 46.6
Ascott Residence Trust A68U 2,270.1 5.8 -7.6 9.2
Frasers Logistics & Industrial Trust BUOU 2,107.2 1.9 -0.4 NA 
CDL Hospitality Trusts J85 1,794.8 4.8 -5.1 34.3
ESR-REIT J91U 1,521.0 2.0 -5.6 0.1
Manulife US REIT* BTOU 1,344.5 -4.0 -8.6 NA 
Cache Logistics Trust K2LU 761.8 -2.7 -9.0 -8.2
Sabana Shariah Compliant Industrial REIT M1GU 437.0 -0.5 -4.8 -22.3
Average 1.9 -3.8 15.0


Name SGX Code Market Cap
S$m
Dvd Ind Yld
%
P/B
(x)
Aggregate Leverage Ratio
(%)
Ratio as of
CapitaLand Commercial Trust C61U 6,476.7 4.9 0.9 35.3 30-Sep
Mapletree Logistics Trust M44U 4,383.2 6.4 1.0 38.1 30-Sep
Ascott Residence Trust A68U 2,270.1 6.6 0.7 35.7 30-Jun
Frasers Logistics & Industrial Trust BUOU 2,107.2 7.2 1.1 36.3 30-Jun
CDL Hospitality Trusts J85 1,794.8 6.4 1.0 33.2 30-Jun
ESR-REIT J91U 1,521.0 7.7 0.7 30.3 30-Sep
Manulife US REIT* BTOU 1,344.5 6.6 0.9 37.3 30-Jun
Cache Logistics Trust K2LU 761.8 8.5 0.9 35.6 30-Sep
Sabana Shariah Compliant Industrial REIT M1GU 437.0 8.0 0.8 38.6 30-Sep
Average 6.9 0.9 35.6

Source: SGX StockFacts & Bloomberg (data as of 26 Oct 2018 except for 3Q18 figures)
Note: Manulife US REIT is traded in USD with SGD equivalents shown in table




As REITs are obliged to pay out a minimum 90% of their income in distributions to enjoy tax exemptions, they may not be able to build up sufficient internal cash resources to purchase high-quality and yield-accretive assets for growth. As a result, apart from bank loans, REITs may raise funds for such investments through rights issues.

SGX-listed trusts have a gearing ratio limit of 45% set by the Monetary Authority of Singapore (MAS). Gearing or aggregate leverage ratio is calculated via dividing the trust’s total debt by its total assets. Equity fund-raising through rights issues is one way to keep debt levels – and gearing ratios – within the regulatory cap.

Singapore REITs are also facing a higher interest-rate environment. Since January 2017, the Federal Reserve has raised US interest rates six times – with the most recent hike in September. The Fed has signalled its intention to raise rates again in December, and three more times next year, assuming the world’s largest economy continues to grow moderately and inflation remains in check.

Despite the less-than-favourable backdrop, analysts have noted revived investor interest in REITs recently. This is driven by a flight to safety amidst rising risk-aversion, following ongoing US-Sino trade tensions, fears over Italy’s budget woes and the upcoming US mid-term elections. Sentiment has also been boosted by improving fundamentals in the domestic office and hotel property segments, DBS Group Research noted in a sector report published on 24 Aug 2018.

DBS Research pointed to “green shoots” across all real estate subsectors, noting that the office segment remains its preferred sector as a result of a sustained improvement in office rents. For the retail sector, the pace of negative rental revisions has moderated, while industrial rents are bottoming, with the odds of a recovery next year increasing, it added.




Did You Know

REITs and Stapled Trusts invest in a diversified pool of professionally managed real estate assets and raise capital to purchase primarily real estate assets, usually with a view to generate income for unit holders of the fund. Like stocks, REITs and Stapled Trusts have market risk – unit prices can move against the investor’s expectations. Other risks associated with a REIT or Stapled Trust investment can vary, and depend on the unique characteristics of each Trust (i.e. leverage ratio, cost of refinancing, alignment of management fees), as well as the geographical location and quality of the underlying property assets (i.e. concentration of properties, length of lease). Other risks associated with stock investing (i.e. price risk, volatility and liquidity risks) also apply.







This article is provided by SGX My Gateway.



SGX My Gateway

SGX's investor education portal with market, product and investment information and events. Sign up now at sgx.com/mygateway to receive our investment updates and economic calendar.

This document is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Singapore Exchange Limited (“SGX”) to any registration or licensing requirement. This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document is for general circulation only. It does not address the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Use of and/or reliance on this document is entirely at the reader’s own risk. Further information on this investment product may be obtained from www.sgx.com. Investment products are subject to significant investment risks, including the possible loss of the principal amount invested. Past performance of investment products is not indicative of their future performance. Examples provided are for illustrative purposes only. While each of SGX and its affiliates (collectively, the SGX Group Companies) have taken reasonable care to ensure the accuracy and completeness of the information provided, each of the SGX Group Companies disclaims any and all guarantees, representations and warranties, expressed or implied, in relation to this document and shall not be responsible or liable (whether under contract, tort (including negligence) or otherwise) for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind, including without limitation loss of profit, loss of reputation and loss of opportunity) suffered or incurred by any person due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information, or arising from and/or in connection with this document. The information in this document may have been obtained via third party sources and which have not been independently verified by any SGX Group Company. No SGX Group Company endorses or shall be liable for the content of information provided by third parties. The SGX Group Companies may deal in investment products in the usual course of their business, and may be on the opposite side of any trades. SGX is an exempt financial adviser under the Financial Advisers Act (Cap. 110) of Singapore. The information in this document is subject to change without notice. This document shall not be reproduced, republished, uploaded, linked, posted, transmitted, adapted, copied, translated, modified, edited or otherwise displayed or distributed in any manner without SGX’s prior written consent.












Stock / REIT Search

Advertisement

Advertisement