SGX Market Updates

REIT Sector Continues to Grow in Early 2020


PUBLISHED ON |

24 February 2020

  • Increasing participation has seen Singapore’s 43 property trusts contribute 26% of the stock market’s S$1.23 billion average daily turnover in the YTD. Trusts with the highest turnover growth, compared to 2019, include Prime US REIT, Dasin Retail Trust, Keppel Pacific Oak US REIT, CDL Hospitality Trusts & Manulife US REIT.

  • Last year, the 5 REITs that saw the highest net institutional inflow averaged a 35% total return in 2019. This year the 5 REITs that saw the highest net institutional inflow through to Feb 21, also averaged higher than benchmark total returns of 9%.

  • Elite Commercial REIT has been the second biggest IPO by deal size across the ASEAN exchanges in the 2020 YTD and 12th largest across the broader Asian Exchanges. The UK-focused REIT has generated a 9% return since its debut on 5 February.




Globally, REITs have generated a median total return of 3.6% in the 2020 year-to-date, following a median total return of 20.5% in 2019. The US Dollar Index has also started the 2020 year with similar 3.5% gains, and the yield on 10-year US Treasury Notes has declined from 1.93% at the end of 2019, to 1.47% at present. The SPDR Gold ETF price has also gained by 11.3% in SGD terms since the end of 2019. A combination of market drivers, from global rotation into less riskier assets, to the US economy leading the G7 growth outlook for 2020, have accounted for these moves. The gain in the USD was also in spite of wider consensus estimates for a cut rather than hike in the Fed Funds Rate in 2020. 

 In Singapore the 43 trusts that represent the REIT Sector have generated similar average 2020 year-to-date total returns of 3.5%, while the overall market value of the entire sector has edged higher from S$112 billion to S$117 billion. Singapore’s five strongest performing property trusts in the 2020 year-to-date were Keppel DC REIT, Mapletree Logistics Trust, Ascendas India Trust, Prime US REIT and Mapletree Industrial Trust.

Keppel DC REIT, Mapletree Logisitics Trust and Ascendas India Trust were also amongst Singapore’s five strongest property trusts in 2019. Note that Ascendas India Trust is a Business Trust which owns 7 IT parks and one logistics park in India. 



Keppel DC REIT’s Performance Parallel with World’s Fifth Biggest REIT since IPO 

Keppel DC REIT has generated a 22.2% total return in the 2020 year-to-date, the strongest performer of Singapore’s REIT Sector, after the data centre REIT was also the strongest of the Sector in 2019. For its FY19 (ending 31 Dec), Keppel DC REIT grew its gross revenue and net property income by 11% and 12% respectively from FY18.

Similarly, in the 2020 year-to-date, Equinix Inc has gained 16.8% in SGD terms, and for its FY19 (ending 31 Dec), Equinix Inc, increased its annual revenue by 10% from FY18. Equinix Inc is the world’s fifth largest capitalised REIT, and the world’s largest data centre REIT.

Keppel DC REIT had grown its portfolio from eight assets across six countries with a value of S$1.0 billion at the time of its IPO on 12 Dec 2014, to 17 assets across eight countries with a portfolio value of S$2.6 billion at the end of 2019. 

Since listing on 12 December 2014, Keppel DC REIT units have generated a 180% gain, whilst shares of Equinix Inc gained 200%. Taking dividend distributions into account, and assuming those dividends were reinvested, Keppel DC REIT generated a 264% total return, similar to the 248% total return in SGD terms of Equinix.


Keppel DC REIT Comparative Price Move


Industry drivers for data centre REITs in 2020 include digitalisation and cloud deployment through cloud provider spending and the  growing market for cloud infrastructure, 5G and mobile data traffic, in addition to IoT spending.



S-REITs that have Drawn More Turnover & Net Institutional Flow in 2020

REITs have continued to maintain turnover growth in the 2020 year-to-date, with 43 property trusts generating 26% of the stock market’s S$1.23 billion average daily turnover. This compared to the REIT Sector contributing 24% to Singapore’s overall stock market turnover in 2019.

Trusts with the highest turnover growth, based on their respective 2019 turnovers, included Prime US REIT, Dasin Retail Trust, Keppel Pacific Oak US REIT, CDL Hospitality Trusts & Manulife US REIT.


SGX 10 Trusts with turnover growth


In the 2020 year through to 21 February, the 43 property trusts have been recipient of a combined S$121 million in net institutional inflow. This year, the 5 REITs that saw the highest net institutional inflow through to February 21, Ascendas REIT, Mapletree Logistics Trust, Frasers Commercial Trust, Frasers Logistics & Industrial Trust and Keppel REIT averaged total returns of 8.5%.


SGX 10 Trusts Highest Net Institutional Inflow



Elite Commercial REIT is 12th Largest IPO by Deal Value Across APAC in 2020 YTD

Elite Commercial REIT has been the second biggest IPO by deal size across the ASEAN exchanges in the 2020 year-to-date and 12th largest across the broader Asian Pacific Exchanges (as of 21 Feb).

The REIT has generated an 8.8% return since listing on 5 February.

UK Eversheds Sutherland advised on the listing of Singapore’s first UK-focused REIT, taking the lead on all non-Singaporean legal work streams, working closely with EY and Allen & Gledhill teams in Singapore. As highlighted here, a team of more than 40 partners and lawyers within Eversheds Sutherland’s cross-practice UK investment team provided real estate, corporate, tax, regulatory, funds and banking advice throughout the transaction. Elite Commercial REIT has a portfolio of 97 predominantly freehold commercial properties on leased space to the UK Government. 


SGX Listed Trust SGX
Code
Market Cap
S$M
2020 YTD
Average
Daily
Turnover
(S$M)
2020 YTD
SGD Total
Return
%
2020 YTD
Net Institutional
Inflow
(S$M)
Ascendas REIT A17U 11,904 38.27 12.0 69.1
CapitaMall Trust C38U 9,222 33.26 2.9 -0.3
CapitaCom Trust C61U 7,870 25.63 4.4 6.2
Mapletree Com Trust N2IU 7,773 25.32 -0.9 2.2
Mapletree Log Trust M44U 7,601 23.94 15.8 25.1
Suntec REIT T82U 5,088 18.78 -0.4 -10.1
Mapletree Ind Trust ME8U 6,405 17.41 13.3 8.5
Mapletree NAC Trust RW0U 3,769 14.65 3.1 5.5
Keppel DC REIT AJBU 4,115 11.77 22.2 12.1
Ascott Trust* HMN 4,039 11.01 1.7 -12.7
Frasers Log & Ind Trust BUOU 2,963 10.32 5.6 17.3
Keppel REIT K71U 4,328 9.92 4.4 15.2
CDL HTrust* J85 1,857 8.16 -2.6 -12.2
Manulife REIT USD BTOU 2,264 7.08 8.6 8.7
Capita Retail China Trust AU8U 1,826 6.57 -4.0 -8.1
Frasers Cpt Trust J69U 3,381 6.56 8.6 10.0
ESR-REIT J91U 1,885 4.88 3.5 9.5
Cromwell REIT EUR CNNU 2,185 4.38 5.2 -1.5
Frasers Com Trust ND8U 1,564 3.64 4.5 18.3
Lendlease REIT JYEU 1,045 3.05 -2.4 -14.1
Sasseur REIT CRPU 975 2.77 -7.9 -8.7
KepPacOak REIT USD CMOU 1,042 2.71 9.3 -2.7
SPH REIT SK6U 2,923 2.61 -0.9 -1.4
Ascendas-iTrust** CY6U 2,039 2.38 15.2 3.9
First REIT AW9U 808 2.37 3.7 -11.4
Far East H Trust* Q5T 1,265 2.35 -10.9 -4.4
AIMS APAC REIT O5RU 1,020 2.05 3.2 4.8
Prime US REIT USD OXMU 1,501 1.85 14.2 -0.6
Eagle H Trust USD* LIW 634 1.69 -0.8 -4.6
StarhillGbl REIT P40U 1,553 1.63 -0.5 0.2
OUE Com REIT TS0U 2,777 1.60 -7.0 -3.9
EliteCom REIT GBP MXNU 446 1.55 8.8 4.6
ParkwayLife REIT C2PU 2,220 1.44 11.6 2.5
EC World REIT BWCU 593 1.40 -0.7 -10.7
Cache Log Trust K2LU 770 1.00 1.3 0.1
Frasers HTrust* ACV 1,337 0.89 -1.4 -1.3
Lippo Malls Trust D5IU 666 0.83 2.2 -2.7
SoilbuildBiz REIT SV3U 638 0.74 -1.1 2.0
ARA HTrust USD* XZL 683 0.51 2.7 7.7
Dasin Retail Trust** CEDU 534 0.45 -1.2 -1.1
Sabana REIT M1GU 484 0.44 1.7 1.9
IREIT Global UD1U 542 0.37 8.2 -0.7
BHG Retail REIT BMGU 336 0.03 -3.6 -0.3
Average   3.5

* Stapled Trust
** Business Trust
Source: SGX, Bloomberg, Thomson Reuters (Data as of 21 February 2020)







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