Singapore’s 30th REIT, Manulife US REIT, Scheduled To List On Friday (20 May)

Real Estate Investment Trusts (REITs) raise capital to purchase primarily real estate assets, usually established with a view to generating income for unit holders of the fund. This allows individual investors to access real property assets, and share the benefits and risks of owning a portfolio of properties, which typically distribute income at regular intervals through dividends.

Singapore currently lists 29 REITS and six stapled securities. On Friday afternoon a thirtieth REIT – Manulife US REIT is scheduled to list on Singapore Exchange (SGX). Manulife US REIT is a Singapore REIT 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 will comprise three freehold office properties in the United States, namely Figueroa, Michelson and Peachtree. As the IPO Portfolio is, and future Properties will be, located in the US,  Manulife US REIT’s Gross Revenue and results of operations depend upon the performance of the US economy. More details can be found on the prospectus and product highlight sheet here.

At present, five of the existing 29 REITs are categorised to Office REITs according to the Global Industry Classification Standard (GICS®). These five REITs are CapitaLand Commercial Trust, Keppel REIT, Frasers Commercial Trust, OUE Commercial Real Estate Investment Trust and IREIT Global. The five REITs have all gained in the 2016 year through to the 16 May close, with average total returns at 8.2%.

The five Office REITs also include the most recent entrant to the Straits Times Index (STI) - CapitaLand Commercial Trust. Office REITs are companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of office properties.

Recent Comparative Performance of the SGX S-REIT 20 Index

The SGX S-REIT 20 Index is an adjusted free-float market capitalisation-weighted index that measures the performance of the 20 largest and most tradable REITs listed on SGX.  The Index is made up of 20 constituents with a combined market capitalisation of more than S$50 billion. In the 2016 year through to 16 May, the Index generated a 8.0% total return, with swings on 17 May seeing the year to date total return increase to 8.1%. This compared to a 4.6% total return for the MSCI World REIT Index in Singapore dollar terms over the 2016 year through to the 16 May close.

The SGX S-REIT 20 Index maintains a dividend yield of 6.2% compared to the MSCI World REIT Index’s dividend yield of 4.1%.

The table below details the 20 constituents of the SGX S-REIT 20 Index, and is sorted according to market capitalisation. Click on each stock to visit its profile page on SGX StockFacts.

Source: SGX, Bloomberg & SGX StockFacts (data as of 16 May 2016)

Source: SGX, Bloomberg & SGX StockFacts (data as of 16 May 2016)