SGX Market Updates

5 REITs in The STI Reserve List Averaged 13% Total Return in YTD


25 April 2019

  • While the benchmark STI includes three REITs among its 30 constituents, the STI Reserve List is wholly comprised of 5 REITs: Mapletree Commercial Trust, Suntec REIT, Mapletree Logistics Trust, Keppel REIT, and Mapletree North Asia Commercial Trust.

  • In the 2019 YTD, these 5 trusts have averaged a total return of 12.5%, bringing their 1Y and 3Y total returns to 15.0% and 48.7% respectively. They also average a P/B ratio of 1.1x and a dividend indicated yield of 5.0%.

  • The 5 REITs, with a combined market cap of more than S$24 billion, own assets that span the office, retail and industrial/logistics sectors and are located across major cities in the Asia-Pacific region.

Performance of STI Reserve Stocks

While the benchmark Straits Times Index (STI) includes three Real Estate Investment Trusts (REITs) among its 30 constituents, the STI Reserve List is wholly comprised of REITs.

The 5 trusts in the STI Reserve List are Mapletree Commercial Trust, Suntec REIT, Mapletree Logistics Trust, Keppel REIT, and Mapletree North Asia Commercial Trust, and they have a combined market capitalisation of more than S$24 billion. Their asset portfolios span office towers, shopping malls, logistics warehouses, and business parks located in major cities across the Asia-Pacific region, including Singapore, Malaysia, Vietnam, Australia, Greater China, South Korea as well as Japan.

Over the past week, Keppel REIT, Mapletree Commercial Trust and Suntec REIT have unveiled their results for the 3 months ended 31 March 2019. Mapletree Logistics Trust will release its earnings tomorrow, while Mapletree North Asia Commercial Trust will report on Monday.

In the 2019 year-to-date, these 5 trusts have averaged a total return of 12.5%, bringing their one-year and three-year total returns to 15.0% and 48.7% respectively. They also average a price-to-book ratio of 1.1x and a dividend indicated yield of 5.0%.

The table below details the five REITs in the STI Reserve List, sorted by market capitalisation.

Name SGX
1 Yr
3 Yr
Ind Yield
MAPLETREE COMMERCIAL TRUST N2IU 5,404 13.0 21.5 46.6 1.3 4.8
MAPLETREE LOGISTICS TRUST M44U 5,252 16.0 23.5 61.2 1.3 5.4
SUNTEC REIT T82U 5,066 5.9 1.7 26.7 0.9 5.4
KEPPEL REIT K71U 4,187 7.4 3.2 38.4 0.9 4.6
Average 12.5 15.0 48.7 1.1 5.2

Source: Bloomberg & StockFacts (data as of 23 April 2019)

The STI Reserve List is used in the event that one or more of the STI constituents are deleted during the period up to the next quarterly review. As detailed in the STI Ground Rules, when a company is going to be removed from the STI, the vacancy will be filled by selecting the highest ranking security by full market value in the Reserve List as at the close of the index calculation two days prior to the deletion.

For a previously published Market Update on the five best-performing S-REITs in the YTD, click here.

For the March quarter earnings schedule for S-REITs, click here.

For a chartbook on S-REITs and Property Trusts listed on SGX, click here.

Earnings Highlights of 3 STI Reserve Stocks

Keppel REIT

For the 3 months ended 31 March 2019, Keppel REIT reported a distribution per unit (DPU) of 1.39 Singapore cents, down 2.1% YoY. Net property income attributable to unit holders declined 12.6% YoY to S$27.3 million.

Looking ahead, Keppel REIT said it remains focused on delivering stable and sustainable distributions to unit holders amidst an uncertain macro‐economic environment.  It cited CBRE data pointing to continued growth in the Singapore office sector, with QoQ gains in average Grade A office rents and occupancy levels. CBRE is also maintaining a positive outlook on the Singapore office market, supported by a limited supply pipeline which could further tighten in the medium term if older buildings are redeveloped in view of Urban Redevelopment Authority’s (URA) Central Business District (CBD) incentive scheme.

As for Australia, it highlighted JLL data that indicated healthy leasing activity and strong net absorption in the market. National CBD office occupancy rates continued their upward trend QoQ in the December 2018 quarter, with vacancy rates expected to remain low. 

Click here for the full results statement. 

Mapletree Commercial Trust

For the three months ended 31 March 2019, Mapletree Commercial Trust reported a DPU of 2.31 Singapore cents, up 1.8% YoY. Net property income rose 3.9% to S$87.6 million, while gross revenue gained 3.7% to S$112.9 million.

The trust noted that its portfolio is expected to remain resilient, given VivoCity mall’s strong positioning and consistent performance, as well as the manageable lease expiries in its office and business park properties.

It added that for the Singapore office market, 1Q 2019 indicators continue to look strong, with tightening vacancy, decent absorption and growing rents, according to CBRE data. A potential further cutback in existing office stock is also expected in the medium term, as landlords consider redevelopment options after the URA’s announcement of the CBD incentive scheme.

Click here for the full results statement. 

Suntec REIT

For the three months ended 31 March 2019, Suntec REIT reported a DPU of 2.434 Singapore cents, flat from the year-ago period. Net property income fell 7.6% YoY to S$58.2 million, while gross revenue eased 1.1% to S$89.7 million.

The trust pointed out that the Singapore office sector continued to improve in 1Q19, and added that given limited supply coming onstream this year, occupancy and rental levels for its Singapore office portfolio are expected to further improve.

The Singapore retail market was stable in 1Q19, with demand driven by expansions of existing brands, spinoffs by F&B groups and activity-based retailers. Having strengthened the tenancy mix of Suntec City Mall in 2018, the Trust Manager expects to continue building on this in 2019. The mall is poised to continue to perform well, notwithstanding continuing challenges in the retail sector, it added.

As for its Australian portfolio, Suntec REIT noted that leasing activity continues to be positive in the Sydney and Melbourne office markets, driven mainly by flight to quality and expansionary activity. Occupancy and rental levels for its Australian assets this year are expected to remain high, given the strong demand coupled with limited new supply, it added.

Click here for the full results statement.

This article is provided by SGX My Gateway.

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