SGX Market Updates

SGX’s Largest Office REITs ~ 2019 December Quarter Earnings


PUBLISHED ON |

17 February 2020

  • 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 herehere 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)







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