Singapore's REIT Sector Has Expanded 7%
OREANDA-NEWS. In the 2016 year to date, two Real Estate Investment Trusts (REITs) have listed on the Mainboard of Singapore Exchange (SGX). These two REITs, Manulife US REIT and Frasers Logistics & Industrial Trust, have added S$2 billion to the current market capitalisation of Singapore’s REIT Sector. Yesterday, Frasers Logistics & Industrial Trust closed 2.2% above its offer price, while Manulife US REIT closed 2.4% below its units’ initial offer price.
United States & Australia Real Estate Exposure
Frasers Logistics & Industrial Trust is the largest initial pure-play Australian Industrial REIT listed in Singapore.
The initial portfolio of Frasers Logistics & Industrial Trust comprises 51 industrial properties in Australia across major industrial markets such as Sydney, Melbourne and Brisbane. Its properties total an aggregate gross lettable area of approximately 1.2 million square metres, with tenants from diversified sectors, including the consumer, logistics and manufacturing industries.
Meanwhile, Manulife US REIT which debuted last month, became the first pure-play US Office REIT to list in Singapore. Manulife US REIT was established with the investment strategy principally to invest, directly or indirectly, in a portfolio of income-producing office real estate in key markets in the United States, as well as real estate-related assets. The IPO Portfolio comprises three freehold office properties in the United States, namely Figueroa, Michelson and Peachtree.
Recent REIT Sector Performance
Singapore’s REIT Sector is now made up of 31 REITs and six Stapled Trusts. Together, the 37 trusts have averaged a 4.1% total return in the 2016 year thus far and an indicative yield of 7.2%. The average return is similar to that of the benchmark index, the SGX S-REIT 20 Index, which has generated a 4.4% total return over the period. These gains, in addition to two IPOs and an asset disposal, have seen overall capitalisation of Singapore’s REIT Sector expand to S$66.57 billion from S$62.39 billion.
Saizen REIT was the best performing REIT in the year thus far following its asset disposal which saw unitholders receive S$1.056 per unit distribution in March. The next five best performing stocks of Singapore’s REIT sector in the YTD are Keppel REIT, Mapletree Commercial Trust, Mapletree Industrial Trust, Suntec REIT and Lippo Malls Indonesia Retail Trust. These five trusts have averaged a YTD return of 13.3%.
The five trusts with the highest yields are Cache Logistics Trust, Lippo Malls Indonesia Retail Trust, Sabana Shariah Compliant Industrial REIT, Viva Industrial Trust, and Soilbuild Business Space REIT, averaging dividend yields of 9.5%.