SGX Market Updates

REIT Watch - 10 S-Reits That Top Retail Net Inflows in the Year to Date

Publish date: Mon, 19 Feb 2024, 08:53 AM
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THE iEdge S-Reit Index declined 5.6 per cent on a total return basis in the year to date, with declines also recorded in the FTSE EPRA Nareit Index series which track global Reits. Reits started the year slightly weaker after the Federal Open Market Committee (FOMC) announced on Jan 31 that it would maintain its policy rate in the range of 5.25 to 5.5 per cent.

Expectations of a rate cut at the March 2024 FOMC on the CME Fed Watch Tool also fell from an earlier 90 per cent to the current 10 per cent. This has coincided with S-Reits booking more than S$200 million in net institutional buying (note that net buy/sell amount is derived by subtracting total sell amount from total buy amount) in the first six weeks of 2024, with net flows revealing that institutions became more uncertain about the timing of the rate cut.

On the contrary, retail investors have been active participants in the sector, recording over S$280 million in net buying activity in the year to date through to Feb 15.

The 10 S-Reits which recorded largest net retail inflows in the year to date were Mapletree Logistics Trust, Keppel DC Reit, CapitaLand Ascendas Reit, Mapletree Pan Asia Commercial Trust, CapitaLand China Trust, CapitaLand Ascott Trust, CapitaLand Integrated Commercial Trust, Frasers Logistics & Commercial Trust, CDL Hospitality Trusts, and ParkwayLife Reit. These 10 S-Reits contribute S$250 million in net retail inflows, or nearly 90 per cent of the combined net retail inflows in the year to date.

Mapletree Logistics Trust (MLT) announced that its gross revenue for Q3 FY23/24 increased by 2.1 per cent year on year to S$184.0 million, and net property income (NPI) rose 1.5 per cent to S$159.5 million. Growth was largely driven by higher contribution from Singapore properties and new overseas acquisitions completed in Q1 FY23/24 but was partly offset by weaker performance in China and depreciation of various currencies.

Distribution per unit (DPU) grew 1.2 per cent to 2.253 Singapore cents. During the quarter, MLT deepened its presence in India with the proposed acquisition of a modern Grade A warehouse in Farukhnagar, Delhi NCR, and completed divestments of two assets in Malaysia and Singapore. In tackling currency volatility, MLT has hedged approximately 80 per cent of its income stream for the next 12 months in Singapore dollars and around 83 per cent of total debt hedged at fixed rates.

CapitaLand Ascendas Reit (CLAR) reported that its gross revenue for FY2023 rose by 9.4 per cent year on year to S$1.48 billion, and NPI rose 5.6 per cent to cross the S$1 billion mark for the first time since its IPO in 2002. Growth was driven by acquisitions completed in the past year as well as higher occupancy and positive rental reversions achieved in its Singapore portfolio. CLAR’s overall FY2023 DPU declined 4.0 per cent to 15.160 Singapore cents on lower distribution, mainly due to higher interest expenses. Despite higher interest rates, CLAR has maintained a leverage ratio of 37.9 per cent, with 79.1 per cent at fixed rates.

Looking at stock performance on a year-to-date basis, ParkwayLife Reit (PLife Reit) was the best performing of the 10 S-Reits that topped net retail inflows, generating 2.7 per cent in total returns.

PLife Reit announced that its gross revenue for FY2023 increased 13.5 per cent year on year to S$147.5 million, and NPI rose 14.1 per cent to S$139.1 million. Growth was driven by contributions from properties acquired in the past two years, higher rent from Singapore hospitals under the new master lease agreements and partially offset by a weaker Japanese yen. PLife Reit’s FY2023 DPU grew 2.7 per cent to 14.77 Singapore cents. During the year, PLife Reit acquired two new nursing homes in Osaka Prefecture and has enlarged its portfolio to 63 healthcare properties across Singapore, Japan and Malaysia. 

Source: SGX Research S-Reits & Property Trusts Chartbook.

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

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