• FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased slightly from 865.91 to 849.11 (-1.94%) compared to last month’s update. Currently the Singapore REIT index is still trading with a range between 816 and 874.
• Yield spread (in reference to 10-year Singapore government bond of 1.52%) continues to tighten from 3.809% to 3.8%. However, the risk premium is still attractive to accumulate Singapore REITs in stages to lock in the current price and to benefit from long-term yield after the recovery. Moving forward, it is expected that DPU will increase due to the recovery of the global economy.
• Technically the REIT Index is still trading in a sideways consolidation waiting for a breakout (upside bias). Current macro factors, such as a low-interest rate environment, aggressive M&A for future DPU growth, wider roll-out of the vaccination and recovery of global economic support the bullish breakout.

Technical analysis 

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased slightly from 865.91 to 849.11 (-1.94%) compared to the last month’s update. Currently the Singapore REIT index is still trading with a range between 816 and 874.

• As for now, short term direction: sideways.
• Immediate support at 816, followed by 775.
• Immediate resistance at 874.

• Most overvalued REITs (based on Price/NAV)
  • Parkway Life REIT (price/NAV = 2.22)
  • Keppel DC REIT (price/NAV = 2.19)
  • Mapletree Industrial Trust (price/NAV = 1.69)
  • Mapletree Logistics Trust (price/NAV = 1.53)
  • ARA LOGOS Logistics Trust (price/NAV = 1.36)

• Most undervalued REITs (based on Price/NAV)
  • First REIT (price/NAV = 0.53)
  • Lippo Malls Indonesia Retail Trust (price/NAV = 0.65)
  • BHG REIT (price/NAV = 0.66)
  • OUE Commercial REIT (price/NAV = 0.67)
  • Starhill Global REIT (price/NAV = 0.68)
  • Suntec REIT (price/NAV = 0.71)
  • All six REITs were also the top six undervalued REITs of April and May 2021

• Highest distribution yield REITs (ttm)
  • First REIT (11.09%)
  • Prime US REIT (8.16%)
  • ESR REIT (7.65%)
  • IREIT Global (7.62%)
  • Sasseur REIT (7.54%)
  • Cromwell European REIT (7.46%)
  • 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.

• Highest gearing ratio REITs
  • Eagle Hospitality Trust (65.5%) * Filed for Chapter 11 Bankruptcy Protection *
  • ARA Hospitality Trust (49.0%)
  • Suntec REIT (44.4%)
  • Elite Commercial REIT (42.1%)
  • ESR REIT (42.0%)
  • Lippo Malls Retail Trust (41.7%)

• Total Singapore REIT market capitalisation = S$106.1 Billion.
  • Decreased from S$108.8 Billion in May 2021.

• Biggest market capitalisation REITs:
  • Capitaland Integrated Commercial Trust ($14.18B)
  • Ascendas REIT ($12.38B)
  • Mapletree Logistics Trust ($8.48B)
  • Mapletree Commercial Trust ($7.06B)
  • Mapletree Industrial Trust ($6.65B)
  • No change in ranking compared to March-May 2021 update.

• Smallest market capitalisation REITs:
  • BHG Retail REIT ($284M)
  • United Hamsphire REIT ($327M)
  • ARA Hospitality Trust ($390M)
  • First REIT ($392M)
  • Sabana REIT ($442M)
  • All five REITs were also the Smallest Market Capitalisation REITs in the March-May 2021 update.

[x-heaD] Fundamental analysis of 39 Singapore REITs

The following is the compilation of 39 Singapore REITs with colour coding of the distribution yield, gearing ratio and price to NAV Ratio.

• Note 1: Soilbuild Business Space REIT (SV3U) has been delisted.
• Note 2: The Financial Ratio are based on past data and there are lagging indicators.
• Note 3: 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.
• Note 4: REITs highlighted in blue have been updated with the latest Q1 2021 business updates.

(Source: https://stocks.cafe/kenny/advanced)

• Price/NAV decreased to 1.03
  • Was 1.04 in May 2021.
  • Singapore Overall REIT sector is at about fair value now.
  • Take note that NAV is adjusted downward for most REITs due to drop in rental income (Property valuation is done using DCF model or comparative model)
• TTM distribution yield decreased to 5.32%
  • Decreased from 5.36% in May 2021.
  • 25.6% of Singapore REITs (10 out of 39) have distribution yields of above 7%.
  • 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 post circuit breaker recovery.
  • Excluded Eagle Hospitality Trust due to suspension.
• Gearing ratio increased to 37.68%. 
  • Increased from 37.53% in May 2021.
  • Gearing Ratios are updated quarterly.
  • In general, Singapore REITs sector gearing ratio is healthy but started to increase due to the reduction of the valuation of portfolios and increase in borrowing due to Covid-19.