REIT Sector Averages 9% Gain From Recent August-September Lows
As noted last week (click here) the REIT Sector maintains an average total debt to total asset ratio that is one third lower than the total debt to total asset ratio for the MSCI World REIT Index. The average debt to asset ratio for the 34 trusts is 34.0%. The debt ratio is calculated by dividing the sum of short-term borrowings and long-term debt by the total assets of the business.
Of the 28 REITs and six stapled securities listed on Singapore Exchange (SGX), 32 have formed 12 month lows over the past two months. The two trusts that have not formed 12 month lows in 2015 are Fortune REIT and Keppel DC Reit.
The 12 month low of Fortune REIT at HKD$6.70 per unit was reached on 14 October last year. Fortune REIT, through its subsidiaries, engages in the ownership and investment of retail shopping malls in Hong Kong. Yesterday Fortune REIT closed at HKD$7.52 a unit and has also paid dividends in February and August, totalling HKD$0.4418. The 2015 low for Fortune REIT on 29 September and 1 October was HKD$7.26 a unit. Hence Fortune REIT has averaged a 3.6% gain from these lows.
Keppel DC REIT was listed on 12 December 2014 with an offer price of S$0.930 a unit. On its first day of listing its units traded at its 12 month low of S$0.945 which was revisited two sessions later. Yesterday the REIT closed at S$1.02 a unit. It’s year-to-date low was S$0.970 a unit on 25 August. Hence Keppel DC REIT has averaged a 5.2% gain from these lows. Keppel DC Reit also paid a S$0.0356 dividend per unit in July. Keppel DC REIT invests, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets, with an initial focus on Asia Pacific and Europe.
From the 12 month lows, the 34 trusts have averaged a 9.7% gain. Using August-September lows for the aforementioned Fortune REIT and Keppel DC REIT the 34 trusts have averaged a 9.3% gain.
As of yesterday’s close, the five REITs which have gained the most since forming their 12-month lows were Far East Hospitality Trust, Cambridge Industrial Trust, OUE Commercial REIT, Frasers Commercial Trust, Ascendas Hospitality Trust, averaging a 15.7% gain.
The five REITS that have gained the least since forming their 12-month lows were SPH REIT, Viva Industrial Trust, Parkway Life REIT, Mapletree Commercial Trust and AIMS AMP Capital Industrial Trust, averaging a 4.3% gain.
Source: Bloomberg (data as of 6 October 2015)
Please note, Fortune REIT traded in HKD, Indicative dividend yield of OUE Hospitality REIT based on distributions since IPO, Keppel DC REIT annualised indicative made up of 1.51 + 1.89 cent distributions for 31 Dec 2014 – 30 June 2015 period.