SGX Market Updates

REIT Watch - 10 S-Reits Which Outperformed in H1

Publish date: Mon, 17 Jul 2023, 10:20 AM

10 outperforming S-Reits in H1 2023

Trust Total returns in H1 2023 (%) Sub-sector Market cap (S$M) Price to book ratio Dividend yield (%)
Keppel DC Reit 25.1 Specialised 3,837 1.59 4.8
Cromwell European Reit 12.4 Diversified 1,309 0.65 11.0
Frasers Logistics & Commercial Trust 10.7 Diversified 4,729 1.00 5.8
Frasers Hospitality Trust 8.4 Hospitality 905 0.73 4.7
Paragon Reit 8.0 Retail 2,678 0.93 5.8
Frasers Centrepoint Trust 7.2 Retail 3,757 0.94 5.6
AIMS APAC Reit 5.6 Industrial 1,002 0.91 8.0
ParkwayLife Reit 5.6 Healthcare 2,281 1.62 3.7
CapitaLand India Trust 5.2 Diversified 1,332 1.02 7.2
CapitaLand Ascott Trust 5.0 Hospitality 3,878 0.97 5.3

SINGAPORE-LISTED real estate investment trusts (S-Reits) continue to hold up despite decelerating global growth, with the iEdge S-Reit Index generating 2.1 per cent in total returns in the first half of 2023, outperforming the Straits Times Index’s 1.2 per cent and the FTSE EPRA Nareit Asia ex Japan Index’s -1.7 per cent.

In fact, 17 out of 40 actively traded S-Reits outperformed the iEdge S-Reit Index during the period.

The top 10 best performing S-Reits in the first six months of the year generated over 9.3 per cent in total returns and average 6.2 per cent in distribution yield.

The 10 S-Reits were Keppel DC Reit, Cromwell European Reit (Cromwell E-Reit), Frasers Logistics & Commercial Trust, Frasers Hospitality Trust, Paragon Reit, Frasers Centrepoint Trust, Aims Apac Reit, ParkwayLife Reit, CapitaLand India Trust, and CapitaLand Ascott Trust.

Outperformance was driven across specialised, healthcare and hospitality sub-sectors at 7.5 per cent, 5.2 per cent, and 4.1 per cent total returns respectively.

On the other hand, underperforming sub-sectors were office, retail and industrial at declines of 23.9 per cent, 11.3 per cent and 0.8 per cent respectively.

Keppel DC Reit was the best performing S-Reit in the first half of 2023, driven by stronger growth in distributable income and distribution per unit at 4.1 per cent and 3.0 per cent respectively in its first-quarter business update.

Majority of growth was contributed by acquisitions and asset enhancement initiatives, and it has maintained a portfolio occupancy of 98.5 per cent.

Keppel DC Reit also received the most net institutional inflows of S$36 million, reversing from a year ago, where institutional investors net sold S$120 million.

Cromwell E-Reit in its Q1 business update posted that its overall portfolio occupancy grew 100 basis points to 95.8 per cent on the back of 6.7 per cent rent reversion and 76.4 per cent tenant retention rate.

The Reit recently announced that it is divesting its asset in Bari, Italy, in line with its strategy to divest non-core and non-strategic assets over the next two to three years.

This was announced after it was in advanced negotiations to sell its office asset in Milan Italy, which has been completed.

Despite lower revenue and distributable income announced in H1 FY23, Frasers Logistics & Commercial Trust maintained portfolio occupancy rate of 95.9 per cent and lower gearing at 27.8 per cent.

Rental reversion for the period January to March 2023 was 3.6 per cent on an incoming rent versus outgoing rent basis and 23.2 per cent on an average rent versus average rent basis.

REIT Watch is a weekly column on The Business Times, read the original version.

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