Singapore REIT Fundamental Analysis Comparison Table – 1 July 2019 (Guest Post)

Singapore REIT Fundamental Analysis Comparison Table – 1 July 2019 (Guest Post)

Technical Analysis of FTSE ST REIT Index (FSTAS8670). FTSE ST Real Estate Investment Trusts (FTSE ST REITIndex)broke out from the 10 years resistance at 875 with significant increase in trading volume. The REIT index increased from 858.67 to 916.95 (+6.78%) and as compared to last post onSingapore REIT Fundamental Comparison Tableon June 3, 2019.

The REIT index is entering in an uncharted territory after breaking new high and may head towards to 1000 points based on projection of 161.8% Fibonacci level. Based on the current chart pattern and and momentum, the sentiment is BULLISH and the trend for Singapore REIT direction is stillUP.However, the REIT index may go for a short term pause before moving higher.

Fundamental Analysis of 39 Singapore REITs

The following is the compilation of 39 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. The 2 new IPO ARA US Hospitality Trust and Eagle Hospitality Trust are not included in this table due to insufficient data points.

    • Price/NAV increases from 1.02 to 1.07 (Singapore Overall REIT sector is over value now).
    • Distribution Yield decreases from 6.51% to 6.22% (take note that this is lagging number). About 33.3% of Singapore REITs (13 out of39) have Distribution Yield > 7%.
    • Gearing Ratio remains at 34.9%. 22 out of 39 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%.
    • The most overvalue REIT is Parkway Life(Price/NAV =1.64), followed by Ascendas REIT (Price/NAV = 1.52), Keppel DC REIT (Price/NAV =1.59) and Mapletree Industrial Trust (Price/NAV = 1.48), Mapletree Logistic Trust (Price/NAV = 1.36), Frasers Logistic & Industrial Trust (Price/NAV = 1.33) and CapitaMAll Trust (Price/NAV = 1.31)
    • The most undervalue (base on NAV) is Fortune REIT(Price/NAV = 0.65), followed by OUE Comm REIT (Price/NAV = 0.71) and Far East Hospitality Trust (Price/NAV = 0.78).
    • The Highest Distribution Yield (TTM) is Sasseur REIT (8.59%) ,followed by First REIT (8.35%), SoilBuildBizREIT(8.39%),Cromwell European REIT (8.54%) andLippo Mall Indonesia Retail Trust (8.04%).
    • The Highest Gearing Ratio are ESR REIT (42.0%), Far East HTrust (39.9%) and OUE Comm REIT (39.4%) andSoilBuildBizREIT (39.3%)
    • Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.7B), CapitaMall Trust ($9.7B), Capitaland Commercial Trust ($8.1B), Mapletree Commercial Trust ($6.0B) and Mapletree Logistic Trust ($5.7B)
    • The bottom 3 REITs with smallestmarket capitalisation are BHG Retail REIT ($354M), Sabana REIT ($484M) and iREIT Global REIT ($485M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision.To learn how to use the table and make investing decision,Sign up nextREIT Investing Seminarhere to learn how to choose a fundamentally strong REIT for long term investing for passive income generation

    • 1 month decreases from 1.88538% to1.88450%
    • 3 month decreases from 2.00338% to2.00192%
    • 6 month decreases from 2.06215% to2.06017%
    • 12 month remains at 2.18675%

Based on current probability of Fed Rate Monitor, the probability of keeping the interest rate at 2.25-2.50% is 0%!This means US Fed Reserve may cut cut the interest rate of 50 bps to 1.75-2.00% by end of this year!



Fundamentally the whole Singapore REITs isover valuenow based on simple average on the Price/NAV. The big cap REITs are getting quite expensive and the distribution yield are not so attractive currently. Most of the DPU yield for big cap REIT is below 5% now. The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.

Yield spread (reference to 10 year Singapore government bond of 2.015%) has tightened from 4.448% to 4.205%. DPU yield for a number of small and mid-cap REITs are still very attractive (>8%) at the moment. Some small and medium size REITs are starting to move up due to attractive risk premium compared to big cap REITs.

Technically, the REIT index is trading in a bullish up trend. This bullish sentiment may probably push the index further up supported by an increasing trading volume caused by the institutional fund inflow into Singapore REITs. In addition, Singapore REITs may take advantage of the low interest rate environment to take on more debt to grow the current portfolio.

Thanks for reading.

Once again, this article is a guest post and was originally posted on Kennys profile on InvestingNote. 

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