SGX Market Updates

SGX’s 10 China-Related S-REITs Returned 16% in 2019 YTD


PUBLISHED ON |

10 June 2019

  • SGX lists 34 REITs, 7 stapled trusts and 3 property trusts with a combined market cap of over S$100 billion. Of the 34 REITs, 10 report revenues to China, and have a combined market cap of nearly S$20 billion. 

  • In Jan-May 2019, Singapore REITs garnered net institutional inflows of S$173.2 million, averaging a monthly return of 2.7% and YTD return of 13.6%. It was also the second top net buy sector in May. 

  • These 10 China-related REITs averaged a total return of +15.7% in the YTD. Among them, the 5 best performers were: Sasseur REIT (+29.2%), Mapletree Logistics Trust (+24.9%), Mapletree North Asia Commercial Trust (+22.9%), Ascott Residence Trust (+20.7%) and CapitaLand Retail China Trust (+17.1%).




Singapore Exchange lists 34 REITs, seven stapled trusts and three property trusts with a combined market cap of over S$100 billion. Two stapled trusts recently listed on SGX – ARA US Hospitality Trust on 9 May, and Eagle Hospitality Trust on 24 May.

REIT popularity in Singapore is exemplified in multiple ways – they comprise one-tenth of Straits Times Index (STI) constituents, all of the STI Reserve List stocks, approximately one-tenth of the total market capitalisation of stocks listed on SGX, and a quarter of the top 20 stocks by turnover on a day-to-day basis.

In the first five months of 2019, Singapore REITs garnered net institutional inflows of S$173.2 million, and averaged a monthly return of 2.7%. It was also the second top net buy sector in May.



Institutional Flows for S-REITs


Total Returns of S-REIT Sector

Source: Bloomberg



Of the 34 REITs on SGX, 10 report revenues to China, and they have a combined market capitalisation of nearly S$20 billion. These 10 China-related  trusts averaged a total return of +15.7% in the 2019 year-to-date, bringing their one-year and three-year total returns to +10.9% and +24.5% respectively. They also averaged a 12-month dividend indicated yield of 6.7% and a price-to-book ratio of 0.8.

In the YTD, the 5 best-performing REITs with China revenues were: Sasseur REIT (+29.2%), Mapletree Logistics Trust (+24.9%), Mapletree North Asia Commercial Trust (+22.9%), Ascott Residence Trust (+20.7%) and CapitaLand Retail China Trust (+17.1%).

The tables below details the 10 REITs on SGX that report revenues to China, sorted by YTD total returns.

Name SGX
Code
Market
Cap
S$m
Total
Return
YTD
%
Total
Return
1 Yr
%
Total
Return
3 Yr
%
SASSEUR REIT CRPU 933 29.2 11.5 NA
MAPLETREE LOGISTICS TRUST M44U 5,546 24.9 27.4 88.6
MAPLETREE NORTH ASIA COMMERCIAL TRUST RW0U 4,327 22.9 23.0 68.8
ASCOTT RESIDENCE TRUST A68U 2,740 20.7 20.8 38.3
CAPITALAND RETAIL CHINA TRUST AU8U 1,538 17.1 4.5 22.2
EC WORLD REIT BWCU 612 16.1 15.5 NA
STARHILL GLOBAL REIT P40U 1,603 11.4 14.3 15.3
OUE COMMERCIAL REIT TS0U 1,389 8.2 -16.6 1.0
DASIN RETAIL TRUST CEDU 487 4.8 7.9 NA
BHG RETAIL REIT BMGU 356 2.0 1.0 11.2
Average 15.7 10.9 24.5


Name SGX
Code
Market
Cap
S$m
12M Div
Ind Yld
(%)
P/B
(x)
Greater China
Revenues
(%)
SASSEUR REIT CRPU 933 7.7 0.8 100
MAPLETREE LOGISTICS TRUST M44U 5,546 5.2 1.0 30.5
MAPLETREE NORTH ASIA COMMERCIAL TRUST RW0U 4,327 5.3 0.8 100
ASCOTT RESIDENCE TRUST A68U 2,740 5.9 0.8 10.5
CAPITALAND RETAIL CHINA TRUST AU8U 1,538 6.6 1.0 100
EC WORLD REIT BWCU 612 8 0.8 100
STARHILL GLOBAL REIT P40U 1,603 5.9 0.8 2.3
OUE COMMERCIAL REIT TS0U 1,389 6.4 0.6 18.1
DASIN RETAIL TRUST CEDU 487 8.2 0.6 100
BHG RETAIL REIT BMGU 356 7.4 0.9 100
Average 6.7 0.8

Source: Bloomberg & StockFacts (data as of 6 June 2019)



China’s Growth Outlook

China’s economy has slowed in the wake of the ongoing Sino-US trade dispute, with both industrial output and retail sales growth declining sharply. In April, industrial output growth eased to 5.4% from 8.5% in March, while retail sales rose by 7.2%, well below the 8.7% increase in March, and the lowest in more than a decade. The country’s manufacturing activity also contracted more than expected in May, with the official manufacturing Purchasing Managers’ Index (PMI) falling sharply to 49.4 from 50.1 in April.

While China registered a higher-than-expected 1.1% expansion in its May exports, following a 2.7% decline in April, many economists expect this to be a one-off phenomenon, driven by pre-existing orders and rushed shipments ahead of announced US tariff hikes. The outlook is for a further worsening in China’s trade performance the in coming months given the lack of clear direction for a resolution of bilateral trade tensions.

Last week, the International Monetary Fund (IMF) cut its growth forecasts for China’s gross domestic product to 6.2% from 6.3% in 2019, and to 6% from 6.1% in 2020, citing heightened uncertainty over the trade spat. 

Both countries have blamed each other for the breakdown in talks in May. So far, frictions have shown no sign of easing, with the office of the US Trade Representative preparing to review imposing 25% tariffs on the remaining approximately $300 billion in imports from China.

Last week, Chinese central bank governor Yi Gang said in a media interview that there is “tremendous” room to adjust monetary policy if the trade war deepens, and also signalled that he is not committed to defending the nation’s currency at a particular level.







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