I had a casual discussion with a friend yesterday where we talked about the performance of the various Singapore-listed REITs (or S-REITs for short) and 2 of the REITs we put side-by-side to evaluate are the 2 blue-chip industrial REITs in Ascendas REIT (SGX:A17U) and Mapletree Industrial Trust (SGX:ME8U) – where both of them have a similar property profile (in that they invest in industrial and data centre properties.)

So, between the 2 REITs, which is a better one in terms of its performances, and also at the time of writing, which is currently the “cheaper” one? Let us have a look at both REITs’ performance over the last 11 years to find out:

Market Capitalisation (Market Cap)

At the time of writing of this post, Ascendas REIT has market cap of S$11.586bn, while Mapletree Industrial Trust has a market cap of S$6.693bn.

Verdict: Ascendas REIT is clearly the winner here with a market cap that’s close to double of that of Mapletree Industrial Trust.

Property Portfolio

At the end of the financial year 2021 (on 31 December 2021), Ascendas REIT’s portfolio comprised of 220 properties across the developed markets of Singapore, Australia, the United States, as well as in the United Kingdom and Europe, with a total assets under management of S$16.3bn.

In Mapletree Industrial Trust’s case, as at the end of the financial year 2021/22 (on 31 March 2022), its portfolio comprises a total of 143 properties in Singapore and North America, with a total assets under management of S$8.8bn.

Verdict: Comparatively, Ascendas REIT is much better among the 2 in terms of the number of properties in its portfolio, along with its total assets under management.

Financial Performance

In this section, we shall be looking at both the REIT’s financial performance over a 11-year period – for Ascendas REIT, it will be between FY2011/12 and FY2021 (do take note that between FY2011/12 and FY2018/19, its financial year end is every 31 March, before changing to 31 December from FY2019 following the REIT’s acquisition by CapitaLand); for Mapletree Industrial Trust, it will be between FY2011/12 and FY2021/22:

Gross Revenue:

Ascendas REIT: It grew from S$503.3m in FY2011/2 to S$1,226.5m in FY2021 – recording a compound annual growth rate (CAGR) of 8%.

Mapletree Industrial Trust: It grew from S$246.4m in FY2011/12 to S$610.1m in FY2021/22 – recording a CAGR of 9%.

Net Property Income:

Ascendas REIT: It grew from S$368.3m in FY2011/12 to S$920.8m in FY2021 – recording a CAGR of 9%.

Mapletree Industrial Trust: It grew from S$171.3m in FY2011/12 to S$472.0m in FY2021/22 – recording a CAGR of 10%.

Distributable Income to Unitholders:

Ascendas REIT: It grew from S$281.7m in FY2011/12 to S$630.0m in FY2021 – recording a CAGR of 8%.

Mapletree Industrial Trust: It grew from S$131.7m in FY2011/12 to S$350.9m in FY2021/22 – recording a CAGR of 9%.

Verdict: In terms of both REITs’ financial performance on a CAGR-basis, Mapletree Industrial Trust edged out here with a slightly better rate over a 11-year period.

Debt Profile

Ascendas REIT: Over a 11-year period, its aggregate leverage (or gearing ratio as some would like to refer to it as) have fluctuated between a low of 28.3% (in FY2012/13) and a high of 37.3% (in FY2015/16). Its aggregate leverage as at the end of FY2021 is at 35.9%.

Mapletree Industrial Trust: In the same time period, the REIT’s aggregate leverage have moved between a low of 28.2% (in FY2012/13) and a high of 40.3% (in FY2020/21). Its aggregate leverage as at the end of FY2021/22 is at 38.4%.

Verdict: While both of them have a very healthy debt profile (where there aggregate leverage remains a distance away from the regulatory limit of 50.0%), but in my opinion, Ascendas REIT edged out slightly here with a lower aggregate leverage at the end of the latest financial year under review, and also its upper range of the last 11 years is also slightly lower compared to Mapletree Industrial Trust.

Portfolio Occupancy

Ascendas REIT: Over a 11-year period, the REIT’s overall portfolio occupancy rate have fluctuated between 87.6% (in FY2015/16) and 94.3% (in FY2011/12). Its portfolio occupancy as at the end of FY2021 is at 93.2%.

Mapletree Industrial Trust: Over a 11-year period, its overall portfolio occupancy rate have moved between a low of 90.0% (in FY2017/18) and a high of 95.4% (in FY2012/13). Its portfolio occupancy as at the end of FY2021/22 is at 94.0%.

Verdict: Mapletree Industrial Trust has a better portfolio occupancy rate among the 2 REITs – apart from having a slightly better occupancy rate in the latest financial year under review, the industrial REIT’s occupancy rate has been maintained at above 90.0% in all the 11 financial years I have looked at.

Distribution Payout to Unitholders

Ascendas REIT: The REIT currently declares a distribution payout to its unitholders on a half-yearly basis (once when it releases its second quarter results, and once when it releases its fourth quarter results). Over a 11-year period, its distribution payout have improved from 13.56 cents/unit in FY2011/12 to 15.258 cents/unit in FY2021/22 – recording a CAGR of 1.08%.

Mapletree Industrial Trust: The REIT declares a distribution payout to its unitholders on a quarterly basis. Over a 11-year period, its distribution payout have improved from 8.41 cents/unit in FY2011/12 to 13.80 cents/unit in FY2021/22 – recording a CAGR of 4.61%.

Verdict: Mapletree Industrial Trust is a clear winner here for having a much better CAGR in terms of its distribution payout to unitholders over the years. Also, my personal preference is towards Mapletree Industrial Trust for the fact that its distribution payout frequency is once every quarter.

Which REIT is Currently “Cheaper”?

The following table is a side-by-side comparison of both REITs’ current valuations based on their current traded prices:

Verdict: Between the 2 REITs, Ascendas REIT is the “cheaper” one due to its lower current P/E and P/B ratios.

Closing Thoughts

So there you have it, a comparison between the 2 blue-chip REITs – both of them have their fair share of strengths in my opinion – while Ascendas REIT is the better one between the 2 in terms of its market cap, portfolio size, and debt profile, but Mapletree Industrial Trust emerged the winner in terms of its financial performance, portfolio occupancy profile, and also in its distribution payout to unitholders over the last 11 financial years.

Personally, I felt that both REITs have displayed their resilience over the years and I am confident of their growth in the coming years ahead (which is why I am a unitholder of both of them – and I intend to stay invested in them for many years to come.)

With that, I have come to the end of my share today. Do take note that the contents above is purely for educational purposes only, and they are by no means a recommendation to buy or sell units of any of the 2 REITs. As always, you should always do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I am a unitholder of both Ascendas REIT and Mapletree Industrial Trust.