At least 10 S-REITs on SGX are engaged in the acquisition, development, ownership, leasing and management of office properties spanning international markets. The 3 largest office REITs by market cap are: CapitaLand Commercial Trust, Mapletree Commercial Trust and Suntec REIT. Mapletree Commercial also owns retail assets, while Suntec REIT owns both retail and convention assets.
For the quarter ended 31 December 2019, SGX's 3 largest office REITs averaged a DPU of 2.362 Singapore cents, an 8.4% YoY rise in net property income to S$82.8 million, and a 9.7% YoY increase in gross revenue to S$111.9 million.
The trio have a combined market cap of more than S$20 billion. Over the 2019 calendar year, they averaged a total return of 26.9%, bringing their 1Y and 3Y total returns to 18.3% and 53.6% respectively.
As at end-2019, Singapore listed 35 REITs, 6 stapled trusts and 2 property trusts. These trusts contributed 24% to day-to-day turnover of Singapore’s stock market over the last calendar year. In contrast, the 43 trusts maintained a combined market value of more than S$111.9 billion, representing 12% of Singapore’s stock market capitalisation of S$937.8 billion at the end of last year.
Of the S-REITs on SGX, at least 10 are engaged in the acquisition, development, ownership, leasing, management and operation of office properties located in Singapore, Malaysia, South Korea, Australia, Europe, UK and the US.
Among these trusts, the 3 largest by market cap are: CapitaLand Commercial Trust, Mapletree Commercial Trust and Suntec REIT. Note that Mapletree Commercial Trust also owns retail assets, while Suntec REIT owns both retail and convention assets. Last month, these three largest commercial REITs reported their results for the three months ended 31 December 2019.
Earnings Highlights
For the quarter ended 31 December 2019, the 3 trusts averaged a distribution per unit (DPU) of 2.362 Singapore cents. Mapletree Commercial Trust reported the highest DPU of 2.460 cents, up 5.6% YoY, which was also the largest YoY increase in DPU among the trio. Suntec REIT was the only trust which reported a YoY decline of 9.4% in DPU to 2.347 Singapore cents, due to an enlarged unit base and lower capital distribution.
These trusts averaged an 8.4% YoY rise in net property income to S$82.8 million, while gross revenue gained an average 9.7% YoY to S$111.9 million.
On average, the 3 REITs averaged an aggregate leverage ratio of 35.4% as of the quarter ended 31 December 2019. This compares with an average of 35.1% in the previous quarter. Suntec REIT had the highest aggregate leverage ratio of 37.7%, while Mapletree Commercial Trust had the lowest gearing of 33.4%.
Interest cover for the trio averaged 4.3 times in the Dec quarter, versus 4.5 times in the Sep quarter. CapitaLand Commercial Trust had the highest interest coverage ratio of 5.6 times in the quarter, followed by Mapletree Commercial Trust at 4.4 times.
Dec 2019 Quarter Financial Results
| Name | DPU (SG cts) |
YoY Chg (%) |
Net Property Income (S$M) |
YoY Chg (%) |
Gross Revenue (S$M) |
YoY Chg (%) |
|---|---|---|---|---|---|---|
| CAPITALAND COMMERCIAL TRUST | 2.280* | 2.7 | 81.9 | 3.3 | 107.8 | 8.9 |
| MAPLETREE COMMERCIAL TRUST | 2.460 | 5.6 | 103.3 | 17.6 | 131.3 | 16.7 |
| SUNTEC REIT | 2.347 | -9.4 | 63.3 | 4.2 | 96.7 | 3.5 |
| Average | 2.362 | -0.4 | 82.8 | 8.4 | 111.9 | 9.7 |
* 4Q2019 DPU was computed on 3.9 bln units (incl. issuance of 105.0 mln units for equity placement & issuance of 1.8 mln units for acquisition fees)
| Name | Aggregate Leverage Ratio (%) as at 31 Dec 2019 |
Aggregate Leverage Ratio (%) as at 30 Sep 2019 |
Interest Coverage Ratio (x) as at 31 Dec 2019 |
Interest Coverage Ratio (x) as at 30 Sep 2019 |
|---|---|---|---|---|
| CAPITALAND COMMERCIAL TRUST | 35.1 | 35.5 | 5.6 | 5.8 |
| MAPLETREE COMMERCIAL TRUST | 33.4 | 31.7 | 4.4 | 4.5 |
| SUNTEC REIT | 37.7 | 38.2 | 2.9 | 3.1 |
| Average | 35.4 | 35.1 | 4.3 | 4.5 |
Source: Company data
Outlook
Based on data from CBRE Research, Singapore’s average monthly Grade A office market rent grew by 6.9% YoY to S$11.55 per square foot as at 31 Dec 2019. Occupancy in Singapore’s Core CBD office buildings as at end-Dec was 95.8%, compared with 96.0% in end-Sep 2019. Macroeconomic uncertainties will continue to weigh on office demand going forward. However, with limited new Grade A office supply completing in the immediate future, CBRE expects Grade A (Core CBD) rent to remain stable.
Click here, here and here for full results releases of CapitaLand Commercial Trust, Mapletree Commercial Trust and Suntec REIT.
2019 Performances
SGX’s 3 largest office REITs have a combined market cap of more than S$20 billion. Over the 2019 calendar year, they averaged a total return of 26.9%, bringing their one-year and three-year total returns to 18.3% and 53.6% respectively.
The two best performers in 2019 were Mapletree Commercial Trust and CapitaLand Commercial Trust, with total returns of 52.6% and 19.2% respectively.
The table below details SGX’s 3 largest office REITs, sorted by market cap.
| Name | SGX Code |
Market Cap S$m |
Total Return 2019 % |
Total Return YTD % |
Total Return 1 Yr % |
Total Return 3 Yr % |
|---|---|---|---|---|---|---|
| CAPITALAND COMMERCIAL TRUST | C61U | 8,063 | 19.2 | 7.0 | 15.9 | 57.9 |
| MAPLETREE COMMERCIAL TRUST | N2IU | 7,872 | 52.6 | -0.5 | 38.1 | 81.2 |
| SUNTEC REIT | T82U | 5,116 | 8.9 | 0.2 | 0.8 | 21.6 |
| Average | 26.9 | 2.2 | 18.3 | 53.6 |
Source: Bloomberg & StockFacts (data as of 12 Feb 20)
