Footfall to retail malls (especially those located in the CBD area) have taken a beating since Phase 2 (Heightened Alert) came into effect from 16 May 2021. Apart from the “no dining in” restriction, some of the more notable measures include group size being reduced to just groups of 2, and that working from home is once again the default.
Today (09 June 2021), there was an article in The New Paper which talked about the current situation, and difficulties faced by retailers – you can read the article in full here – “Retail stores take a beating as footfall slows to a trickle“.
However, it’s not all doom and gloom. As I am writing this post, I note that the number of community cases have come down once again (there are just 3 new cases in the community, with one of them in the workers’ dormitory being reported yesterday, 08 June 2021.) With the number of community cases heading down once again to single digits, my opinion is that it is highly likely that some of the movement restrictions will be relaxed when the Phase 2 (Heightened Alert) ends this Sunday, 13 June 2021.
This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has close to 2,000 followers.
I am of the opinion that any relaxation in movement restrictions could benefit the retail industries, and hence REITs with retail properties in the portfolio could see their unit prices going up in the near-term. There are 6 REITs in Singapore with their portfolio consisting of retail REITs. They are: CapitaLand Integrated Commercial Trust (SGX:C38U), Frasers Centrepoint Trust (SGX:J69U), Mapletree Commercial Trust (SGX:N2IU), Starhill Global REIT (SGX:P40U), SPH REIT (SGX:SK6U), as well as Suntec REIT (SGX:T82U).
In this post, you will find my technical analysis on the 6 REITs – particularly how their unit prices may move in the near-term (bullish as well as bearish scenarios), along with some of the major support and resistance points I’ve identified you may like to take note of.
The technical indicators I’ve used are as follows:
- Moving average on a weekly timeframe – 20-day (in dark green), 50-day (in light green), 100-day (in orange), 150-day (in yellow), and 200-day (in red)
- Bollinger band on a weekly timeframe – both the upper and lower bands in light blue
- MACD on a daily timeframe
- Stochastic on a daily timeframe
1. CapitaLand Integrated Commercial Trust (SGX:C38U)
There are a total of 12 retail malls in the portfolio of CapitaLand Integrated Commercial Trust, and they include: Bedok Mall, Bugis+, Bugis Junction, Bukit Panjang Plaza, Clarke Quay, IMM Building, JCube, Junction 8, Lot One Shoppers’ Mall, Plaza Singapura, as well as Westgate.
The following is the unit price movements of the REIT:
Near-Term Unit Price Movements of CapitaLand Integrated Commercial Trust (SGX:C38U)
At the time of writing (9.45am on 09 June 2021), the unit price of the REIT is up by 1 cent from the previous day to $2.12 – notice how the unit price moved up to $2.13 (where the 20-day moving average on a weekly timeframe is) before bouncing down.
No doubt both the MACD as well as stochastic are in an uptrend, but the latter is way into overbought territory, and my opinion is that in the near-term, its unit price is unlikely to break above the $2.13 resistance line (however, in the scenario where it is able to do so, and on a high volume, then its unit price is likely to head towards where the 100-day moving average is at $2.19.)
The most immediate support line (if the unit price of the REIT retraces) is at $2.04, where the 50-day moving average is.
2. Frasers Centrepoint Trust (SGX:J69U)
The retail REIT’s malls are located in the heartlands – Causeway Point, Century Square, Changi City Point, Hougang Mall, Northpoint City, Tampines 1, Tiong Bahru Plaza, Waterway Point, as well as White Sands.
In my opinion, malls in the heartlands are less affected by the current restrictions due to people continuing to visiting them for their daily necessities (mainly food and groceries.)
The following is the unit price movement of the retail REIT:
Near-Term Unit Price Movements of Frasers Centrepoint Trust (SGX:J69U)
At the time of writing (10.00am on 09 June 2021), the unit price of Frasers Centrepoint Trust was up by 2 cents to $2.41. In terms of its technical indicators, MACD is in an uptrend, and stochastic is about to turn into an uptrend once again (but it is sitting on an overbought level.)
Another thing to take note of is the resistance line at $2.43, where both the 50-day and 150-day moving averages are. Personally, in the near-term, I do not foresee the unit price be able to break above this price point. However, in the event it is able to do so, and on a high volume, then it could possibly go up to where the 20-day moving average is at $2.47.
Finally, in case you’re wondering should the unit price of the retail REIT were to retrace, where could it be potentially headed – the most immediate support line in the near-term is where the 200-day moving average is at $2.36.
3. Mapletree Commercial Trust (SGX:N2IU)
The blue chip REIT has retail mall VivoCity in its portfolio (which serves the community around the Telok Blangah area.) Another property under its portfolio with retail component is the ARC (located in mTower – previously known as PSA Building.)
Here’s the unit price movement of Mapletree Commercial Trust:
Near-Term Unit Price Movements of Mapletree Commercial Trust (SGX:N2IU)
At the time of writing (at 10.10am on 09 June 2021), its unit price moved up by 4 cents to $2.13. Both MACD as well as stochastic are in an uptrend. However, just like the previous 2 REITs we have looked at earlier, the latter is in an overbought position.
Personally, whether or not the unit price is able to go up to $2.20 (where the upper band of the Bollinger Band is) will largely depend on whether or not it can break above the $2.14 resistance line (and do so on a high volume.) If it does not, then its unit price could retreat to where the 20-day, as well as the 100-day moving averages are at $2.08 (which is the immediate support level.)
Should the unit price were to break below the $2.08 support line, then the next support line is at $2.02 – personally, I do not foresee the unit price to break lower than this price point in the near-term (notice how the unit price have bounced back up whenever it touches this price point in the recent trading sessions.)
4. Starhill Global REIT (SGX:P40U)
The retail REIT has properties in a number of geographical locations – Singapore, Malaysia, Australia, China, as well as Japan.
In Singapore, the REIT’s malls are located in the Orchard area – namely Wisma Atria and Ngee Ann City. The malls’ footfall are affected by the lack of tourists in the area, and also by the latest Phase 2 (Heightened Alert) restrictions, where Singaporeans mostly stayed home (even if they head out, most of them will visit only the heartland malls close to their residence.)
Let us take a look at the unit price movement of the REIT below:
Near-Term Unit Price Movements of Starhill Global REIT (SGX:P40U)
At the time of writing (at 10.20am on 09 June 2021), its unit price is down by half a cent (compared to the previous day) at $0.560. While both the MACD and stochastic are in an uptrend, but the latter (just like the 3 other REITs we’ve looked at earlier) is also in an overbought position – suggesting that further upsides could be limited.
Also, notice the resistance line at where the 100-day moving average, as well as the upper band of the Bollinger Band is, at $0.580. Personally, I am of the opinion that even if its unit price were to continue to move up in the near-term, the furthest it could go is to this price point before retreating back down to where the immediate support at $0.540 is.
However, in the scenario its unit price is able to break up this $0.580 resistance line on a high volume, then it could potentially head towards $0.620, where the 100-day moving average is.
5. SPH REIT (SGX:SK6U)
Along with Paragon in Orchard (the mall, just like Ngee Ann City and Wisma Atria, is adversely affected by the lack of tourists as well as by the latest Phase 2 Heightened Alert restrictions), SPH REIT’s portfolio also owns The Clementi Mall, as well as The Rail Mall in Singapore. Apart from the 3 Singapore malls, the retail REIT also has 2 other malls in Australia.
The following is the unit price movements of the retail REIT:
Near-Term Unit Price Movements of SPH REIT (SGX:SK6U)
At the time of writing (10.30am on 09 June 2021), its unit price remains unchanged compared to the previous trading day, at $0.875.
Looking at its technical indicators MACD and stochastic, both of them are in an uptrend position. However, the latter, just like the other REITs I have looked at earlier, is in an overbought territory – which suggests that further upside could be limited.
Personally, I am of the opinion that the retail REIT’s unit price could either move up towards $0.895 (where the upper band of the Bollinger Band is), or down to the range of $0.845 (where the 50-day moving average is) and $0.850 (where the 20-day moving average is.)
6. Suntec REIT (SGX:T82U)
As the name of the REIT implies, Suntec REIT’s portfolio consists of the Suntec City retail mall (located in the CBD and footfall to the mall is definitely impacted by the current tightened safe distancing measures), along with Suntec Convention Centre (however, the impact on the REIT’s income is minimal as it contributed just about 5% towards its total revenue in FY2019.) Apart from properties in Singapore, the REIT also has properties located in Australia.
The following is the unit price movement of the REIT:
Near-Term Unit Price Movements of Suntec REIT (SGX:T82U)
At the time of writing (at 11.05am on 09 June 2021), its unit price is down by 1 cent compared to the previous day at $1.49. While MACD is in an uptrend, but stochastic is about to reverse into a downtrend in overbought territory, suggesting that in the near-term, its unit price is likely to head down towards the immediate support line at $1.48 – where the 50-day moving average is. Should the unit price continue to weaken (and break down this $1.48 support line on a high volume), then it could possibly head down towards the $1.43 support line.
On the other hand, should the unit price movement of the REIT were to move upwards, then in the near-term, it could head up towards where the 20-day moving average is at $1.52; if it is able to break above this resistance line on a high volume, then its unit price could be headed towards the next resistance line at $1.57.
After looking at the charts of the 6 Singapore-listed REITs with retail malls in their portfolio, I noticed that all of them have one thing in common – and that is, their stochastic are in an overbought territory – suggesting that further upsides (in terms of its unit price movements) could be limited at this point in time.
That said, will official announcements on the relaxation of the safe distancing measures from 14 June 2021 (next Monday) be a catalyst for the REITs’ unit prices? In my opinion, it will really depend on the extent to which the measures are being relaxed (however, please do not place your expectations too high and expect that everything will go back to Phase 3 once again; as Minister Lawrence Wong had mentioned earlier, any relaxation of measures will be a gradual one – you can check out the news report about it here.) We can only wait and see for now what the announcements are.
With that, I have come to the end of my share today on my technical analysis of the near-term price movements of Singapore-listed REITs with retail malls in their portfolio. I’m sharing the above for educational purposes only and they certainly do not represent any buy or sell calls for any of the REITs. Please do your own due diligence before you make any investment or trading decisions.
Disclaimer: At the time of writing, I am a unitholder of CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Mapletree Commercial Trust, SPH REIT, and Suntec REIT.
Once again, this article is a guest post and was originally posted on Jun Yuan‘s profile on InvestingNote.
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