• FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 864.41 to 853.56 (-1.25%) compared to last month’s update. The Singapore REIT index reached a high of 873 on April 5th, before falling into the 850-862 range since April 7th, staying in that range ever since.
• Yield spread (in reference to the 10-year Singapore government bond of 2.52% as of 29th April 2022) continued to tighten from 3.49% to 3.44%. The S-REIT Average Yield increased from 5.86% to 6.00%, but the increase in the Government Bond Yields offsets this Average S-REIT Yield increase. The yield of the REITs sector needs to increase to maintain the average yield spread of 4%. Amid all the negative news, S-REITs have been resilient and have one of the highest risk-adjusted dividend yields compared to other stock exchanges.
  
  

Fundamental Analysis of 40 Singapore REITs

The following is the compilation of 40 Singapore REITs with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio.

Price/NAV Ratios Overview

• Price/NAV decreased to 0.99. 
  • Decreased from 1.00 from April 2022.
  • Singapore Overall REIT sector is at fair value now.
  • Take note that NAV is adjusted downward for most REITs due to drop in rental income during the pandemic (Property valuation is done using DCF model or comparative model)
• Most overvalued REITs (based on Price/NAV) 
  • Parkway Life REIT (Price/NAV = 2.06)
  • Keppel DC REIT (Price/NAV = 1.56)
  • Mapletree Industrial Trust (Price/NAV = 1.41)
  • ARA LOGOS Logistics Trust (Price/NAV = 1.27)
  • Mapletree Logistics Trust (Price/NAV = 1.20)
  • Ascendas REIT (Price/NAV = 1.20)
  • No change to the Top 3 compared to March and April updates.
• Most undervalued REITs (based on Price/NAV) 
  • BHG Retail REIT (Price/NAV = 0.60)
  • Lippo Malls Indonesia Retail Trust (Price/NAV = 0.61)
  • EC World REIT (Price/NAV = 0.70)
  • ARA US Hospitality Trust (Price/NAV = 0.72)
  • OUE Commercial REIT (Price/NAV = 0.74)
  • Starhill Global REIT (Price/NAV = 0.74)

Distribution Yields Overview

• TTM Distribution Yield increased to 6.00%. 
  • Increased from 5.86% in April 2022.
  • 14 of 40 Singapore REITs have distribution yields of above 7%. (Same as last month’s update)
  • Do take note that these yield numbers are based on current prices taking into account the delayed distribution/dividend cuts due to COVID-19, and economic recovery. 
• Highest Distribution Yield REITs (ttm) 
  • United Hampshire REIT (9.76%)
  • EC World REIT (9.64%)
  • Prime US REIT (9.10%)
  • Keppel Pacific Oak REIT (8.63%)
  • Manulife US REIT (8.53%)
  • Sasseur REIT (8.51%)
  • Reminder that these yield numbers are based on current prices taking into account delayed distribution/dividend cuts due to COVID-19.
  • Some REITs opted for semi-annual reporting and thus no quarterly DPU was announced.
  • A High Yield should not be the sole ratio to look for when choosing a REIT to invest in.
• Yield Spread decreased to 3.44%. 
  • Decreased from 3.49% in April 2022.

Gearing Ratios Overview

• Gearing Ratio remained similar at 37.05%.  
  • Changed from 37.03% in April 2022.
  • Gearing Ratios are updated quarterly. (Those with Q1 2022 updates have updated gearing ratios)
  • In general, Singapore REITs sector gearing ratio is healthy but increased due to the reduction of the valuation of portfolios and an increase in borrowing due to Covid-19.
• Highest Gearing Ratio REITs 
  • ARA Hospitality Trust (44.3%)
  • Suntec REIT (43.3%)
  • Lippo Malls Indonesia Retail Trust (42.9%)
  • Manulife US REIT (42.8%)
  • Elite Commercial REIT (42.4%)
  • Frasers Hospitality Trust (42.3%)
  • No change to the Top 3 compared to April update.

Market Capitalisation Overview

• Total Singapore REIT Market Capitalisation increased slightly by 0.32%to S$112.25 Billion. 
  • Increased from S$111.89 Billion in April 2022.
• Biggest Market Capitalisation REITs: 
  • Capitaland Integrated Commercial Trust ($15.40B)
  • Ascendas REIT ($12.01B)
  • Mapletree Logistics Trust ($8.36B)
  • Mapletree Industrial Trust ($6.94B)
  • Mapletree Commercial Trust ($6.21B)
  • Frasers Logistics & Commercial Trust ($5.34B)
  • No change in Top 5 rankings since August 2021.
• Smallest Market Capitalisation REITs: 
  • BHG Retail REIT ($281M)
  • ARA US Hospitality Trust ($402M)
  • Lippo Malls Indonesia Retail Trust ($460M)
  • United Hampshire REIT ($479M)
  • Sabana REIT ($486M)
  • First REIT ($508M)
  • No change in Top 4 rankings compared to March and April updates.

40 Singapore REITs at a glance: REIT Table

• The Financial Ratios are based on past data and there are lagging indicators.
• This REIT table takes into account the dividend cuts due to the COVID-19 outbreak. Yield is calculated trailing twelve months (ttm), therefore REITs with delayed payouts might have lower displayed yields, thus yield displayed might be lower for more affected REITs.
• All REITs are now updated with the Q4 2021 business updates/earnings. SPH REIT has the latest Q1 2022 business updates/earnings.
• Digital Core REIT has recently IPOed in December (highlighted in yellow) and have their values extracted from IPO Prospectuses. Yield is calculated based on *Estimated DPU (calculated from the Prospectus) / Current Price.

 What does each Column mean?

• FY DPU: If Green, FY DPU for the recent 4 Quarters is higher than that of the preceding 4 Quarters.
• If Lower, it isRed. 
  • Most REITs are green since it is compared to 2020 as the base (during the pandemic)
• Yield (ttm): Yield, calculated by DPU (trailing twelve months) and Current Price as of April 2nd, 2022 
  • Digital Core REIT: Yield calculated from IPO Prospectus.
• Gearing (%): Leverage Ratio.
• Price/NAV: Price to Book Value. Formula: Current Price (as of April 2nd, 2022) over Net Asset Value per Unit.
• Yield Spread (%): REIT yield (ttm) reference to Gov Bond Yields. REITs trading in USD is referenced to US Gov Bond Yield, everything else is referenced to SG Gov Bond Yield.