SGX Market Updates

FTSE ST Singapore Shariah Index’s 3 Largest REITs


PUBLISHED ON |

22 October 2020

  • Among the 10 largest constituents of the FTSE ST Singapore Shariah Index, 3 are REITs – Mapletree Industrial Trust, Keppel DC REIT and Frasers Logistics & Commercial Trust.

  • Both Mapletree Industrial Trust and Keppel DC REIT are constituents of the STI Index while Frasers Logistics & Commercial Trust is the largest stock on the STI Reserve List. The 3 REITs averaged total returns of 28% and received net institutional inflows of S$145 million in 2020 YTD till 21 October.

  • All 3 REITs have seen limited impact from COVID-19, particularly for Mapletree Industrial Trust and Keppel DC REIT, whose data centre assets are seen as providers of essential services, and have benefited from the acceleration of digitalisation following widespread lockdowns. The performance of Frasers Logistics & Commercial Trust's industrial and logistics assets have also been relatively resilient, with only its retail segments taking a near- to mid-term hit.




The FTSE ST Singapore Shariah Index has been designed to be used as the basis of Shariah compliant investment products that focus on Shariah-compliant companies listed on SGX. Independent screening is carried out by Yasaar Ltd, an organization with a global network of expert Shariah scholars.

Using the FTSE ST All-Share Index as a base universe, constituents are screened against a clear set of Shariah principles to create a robust Shariah-compliant index for the Singapore market.

Among the 10 largest constituents of the FTSE ST Singapore Shariah Index, 3 are REITs – Mapletree Industrial Trust, Keppel DC REIT and Frasers Logistics & Commercial Trust.


FTSE ST Singapore Shariah Index
Top 10 Constituents
SGX
Code
Mkt Cap
S$M
P/B 2020 YTD
Total Returns
%
Sector
SingTel Z74 34,618 1.3 -35.7 Telecommunications
CapitaLand C31 14,177 0.6 -24.2 RealEstate (excl. REITs)
Hongkong Land H78 12,100 0.2 -29.1 RealEstate (excl. REITs)
Singapore Airlines C6L 10,407 0.6 -44.9 Industrials
Mapletree Industrial Trust ME8U 7,474 2.0 26.4 REITs
Venture Corp V03 6,079 2.4 35.2 Technology (Hardware/ Software)
Keppel DC REIT AJBU 4,883 2.6 47.2 REITs
Frasers Logistics & Commercial Trust BUOU 4,540 1.3 11.4 REITs
NetLink NBN Trust CJLU 3,780 1.3 5.3 Telecommunications
ComfortDelGro C52 3,098 1.3 -37.7 Industrials

Source: Bloomberg, SGX Stock Screener, FTSE Russell.
Top 10 constituents based FTSE ST Singapore Shariah Index as of 30 Sep 2020.
Data based on Bloomberg and SGX Stock Screener as of 21 Oct 2020.



Mapletree Industrial Trust (SGX:ME8U)

  • Mapletree Industrial Trust (MIT) on 15 Sept unveiled its plan to acquire a data centre and office in the US state of Virginia for between US$200.6 million and US$262.1 million, a deal which it targets to complete by 1Q 2021.
    • Upon completion, Mapletree Industrial Trust's assets under management will increase to S$6.9 billion from S$6.6 billion as at June 30, assuming that the proposed acquisition was completed on Sep 1 at the lower end of the total acquisition outlay.
    • Data centres will then comprise 41% of MIT's portfolio by AUM, up from 38.5%.
  • Mapletree Industrial Trust has a stable and resilient portfolio anchored by large and diversified tenant base with low dependence on any single tenant or trade sector.
    • Long leases in Mapletree Industrial Trust’s data centres in Singapore and North America as well as build-to-suit projects to underpin portfolio resilience.
  • Mapletree Industrial Trust has enhanced financial flexibility after raising about S$410.0 million from private placement to fund the US acquisition.
    • It believes that the aggregate leverage ratio of 38.8% provides sufficient headroom for investment opportunities.
  • Mapletree Industrial Trust intends to grow by acquisitions and developments.
    • Proposed acquisition of the remaining 60.0% interest in the 14 data centres in the US.
    • Has commenced works for redevelopment of the Kolam Ayer 2 Cluster.
  • The Manager estimates that the rental reliefs extended to tenants would amount to about S$20 million, which will affect Mapletree Industrial Trust’s distributable income for FY20/21.
  • In view of the uncertainty from COVID-19, the Manager has withheld tax-exempt income of S$7.1 million in 1QFY20/21 and S$6.6 million in 4QFY19/20 for greater flexibility in cash management.
    • The Manager expects the income withheld will help to mitigate the impact of rental reliefs to FY20/21 distributions. 


Keppel DC REIT (SGX:AJBU)

  • Keppel DC REIT has been included in the benchmark Straits Times Index (STI) from Oct 19, replacing CapitaLand Commercial Trust, which was delisted from the STI on Oct 16 as it prepares for its merger with CapitaLand Mall Trust.
  • The Manager believes that the prospects for the data centre market remain robust, underpinned by strong digital trends such as rapid cloud adoption, smart technologies, big‐data analytics, and 5G deployment.
    • COVID-19 has been a catalyst to go digital, and some of these online behaviours are expected to continue post-pandemic.
    • According to BroadGroup, the global colocation market is expected to grow by 15% in 2020, while enterprise spending on cloud infrastructure is forecast to grow by 22% CAGR over next 5 years.
    • According to Ericsson, data traffic increased by 20%-100% across markets in Europe, Asia and America as a result of COVID-19 lockdowns, while global mobile data traffic is expected to increase by 31% annually from 2019 to 2025.
    • According to Cisco, 5G subscriptions to generate 2.5 times more traffic than the average 4G  connection, and take up 10.6% of total mobile traffic by 2023.
  • The Manager will continue to leverage its competencies in investment, asset and capital management, and build on Keppel Group’s capabilities in project development and facilities management, to seek opportunities and strengthen its presence across key data centre hubs globally. 


Frasers Logistics & Commercial Trust (SGX:BUOU)

  • To-date, the Frasers Logistics & Commercial Trust portfolio has not been materially impacted by COVID-19, but the situation remains dynamic, with ongoing uncertainty in terms of impact on the countries Frasers Logistics & Commercial Trust has a presence in.
  • The REIT Manager is focused on managing any financial implications arising from COVID-19 and will continue to work closely with Frasers Logistics & Commercial Trust’s customers to overcome challenges.
  • It intends to leverage on the Sponsor’s integrated development and asset management capabilities.
    • Diversified, sizeable ROFR pipeline of assets of more than S$5 billion from Sponsor.
  • Australia
    • Limited impact on the industrial and commercial properties, with eligible SMEs representing a small proportion of Frasers Logistics & Commercial Trust’s Australian portfolio.
    • Expect near- to mid-term impact on the retail components of the Australian portfolio.
  • Singapore
    • Fully passing on any property tax rebate and rental reliefs, as applicable, to eligible tenants.
    • Expect near- to mid-term impact on the retail components of the Singapore portfolio.
  • Europe
    • Limited impact on the German and Dutch industrial portfolio.
    • The UK business park is seeing stable performance.






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