The global Reits sector was among the least performing sectors in the third quarter of 2022, amid a rising interest rates environment. For the quarter, Singapore’s Reits and Property Trusts (S-Reits) sector declined 7 per cent in total returns, slightly outperforming the 10 per cent decline of the broader FTSE EPRA Nareit Developed Index.
Across the sub-sectors, industrial S-Reits saw the least declines, averaging -3 per cent total returns during the quarter, while office S-Reits saw the most declines, averaging -16 per cent total returns.
In terms of net fund flows, the S-Reit sector saw S$360 million of net institutional outflows but received S$504 million of net retail inflows.
There were five S-Reits that received net inflows from both institutional and retail investors. They are CapitaLand Ascendas Reit, Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, Lendlease Global Commercial Reit and Digital Core Reit.
CapitaLand Ascendas Reit (CLAR), which was recently renamed from Ascendas Reit, received net inflows of S$25 million and S$8 million from institutional and retail investors respectively.
The Reit noted that while supply chain disruptions, inflation and rising interest rates could have some impact on tenants’ businesses as well as on CLAR’s operating costs, it is optimistic that structural trends such as expansion of logistics capacities by companies and digitalisation of the economy could drive demand for CLAR’s logistics and data centre segments.
Mapletree Pan Asia Commercial Trust (MPACT) received net inflows of S$20 million from institutional investors and S$14 million from retail investors. The Reit is scheduled to announce its first post-merger financial results for H1 2022/2023 on Oct 27, 2022.
Mapletree Logistics Trust (MLT) received net inflows of S$9 million and S$39 million from institutional and retail investors respectively. MLT observed that while the global economic environment remains highly uncertain, overall leasing demand for warehouse space has stayed resilient, supported by domestic consumption, e-commerce and inventory stockpiling.
Lendlease Global Commercial Reit (LReit) received net inflows of S$1 million and S$4 million from institutional and retail investors respectively.
At the end of August, the Reit announced that it has achieved its net-zero carbon target ahead of its original target and was accomplished through various carbon reduction strategies within its Singapore assets.
LReit expects that this will generate net interest savings to its unitholders as the Reit meets sustainability performance targets under its S$960 million of sustainability-linked loans and S$216 million of sustainability-linked derivatives.
Digital Core Reit received net inflows of S$0.2 million from institutional investors and S$2 million from retail investors. The Reit announced its inaugural acquisition since IPO on Sep 22, 2022. The acquisitions will consist of a 25 per cent interest in an institutional quality freehold data centre in Frankfurt, Germany, valued at 558 million euros, and a 90 per cent interest in an institutional quality freehold data centre in Dallas, Texas, valued at US$199 million.
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