SGX: Distributions Boost Average REIT Return To 4% In YTD

• The 26 REITs listed on SGX have produced a 4.0% average return so far this year with 23 of these counters generating gains.
• The three best performing REITs so far this year were Suntec REIT, CapitaCommercial Trust and CapitaRetail China Trust. 

Singapore Exchange (SGX) lists 26 real estate investment trusts (REITs) on its boards. REITs have become increasingly popular asset class in the city-state over the past decade. These trusts typically raise capital through the initial public offer process to primarily buy real estate assets, which then generate income for investors. Consequently, the yield of the REIT, or how much income it generates as a proportion of the price of each unit of the REIT, is important to investors.  The current average indicative yield of SGX-listed REIT is 6.3%, twice the average indicative yield of the 30 STI constituents. REITs have been available to Singapore investors since 2002 and the majority of the REITs listed on SGX  provide quarterly distributions to unitholders.

The combined market capitalisation of the 26 REITs governed by Singapore's collective investment scheme currently amounts to S$54 billion. The largest segment of the REIT market in terms of capitalisation is that which invests in retail-related property assets like shopping malls. The second largest segment invests in industrial related property assets and industrial parks.

The table below lists all SGX-listed REITs, ranked by market capitalisation. The REITs have averaged a 4.0% total return in the year-to-date period, with the median return at 3.3%. The three best performing REITs have been Suntec REIT, CapitaCommercial Trust and CapitaRetail China Trust. Suntec REIT and CapitaCommercial Trust have generated double digit returns in the year-to-date period of 14.6% and 12.8%, respectively, which have brought their 12-month total returns to a decline of 3.2% and a gain of 1.6%, respectively.

Source: Bloomberg (data as of 11 April 2014), Note: Fortune REIT traded in HKD, indicative dividend yield of OUE Hospitality REIT based on distributions since IPO, SUNTEC REIT indicative yield calculated using annualised recent pro rate payment. * From 2013 IPO offer price.

REITs that are expected to report their latest quarterly financials this week include Keppel REIT, AIMS AMP Capital Industrial REIT Cambridge Industrial Trust, Sabana Shariah Comp Ind REIT and CapitaCommercial Trust. For more reporting dates – subscribe to the economic calendar here.

REITs and property trusts listed on SGX provide a diverse mix of local and international property assets that house industrial, commercial, retail, residential and specialised tenants. For more educational information please visit www.sgx.com/mygateway.