• FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased slightly from 849.11 to 868.08 (2.23%) compared to the last monthly update. Currently the Singapore REIT index is still trading with a range between 816 and 880.
• Yield spread (in reference to 10-year Singapore government bond of 1.539%) continues to tighten from 3.8% to 3.62%. 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) increased slightly from 849.11 to 868.08 (2.23%) compared to the last monthly update. Currently the Singapore REIT index is still trading with a range between 816 and 880.

• As for now, short term direction: sideways.
• Immediate support at 816, followed by 775.
• Immediate resistance at 880.
  

• Most overvalued REITs (based on price/NAV)
  • Parkway Life REIT (Price/NAV = 2.35)
  • Keppel DC REIT (Price/NAV = 2.08)
  • Mapletree Industrial Trust (Price/NAV = 1.69)
  • Mapletree Logistics Trust (Price/NAV = 1.57)
  • ARA LOGOS Logistics Trust (Price/NAV = 1.51)

• Most undervalued REITs (based on price/NAV)
  • First REIT (price/NAV = 0.53)
  • Lippo Malls Indonesia Retail Trust (Price/NAV = 0.63)
  • BHG REIT (price/NAV = 0.66)
  • Starhill Global REIT (price/NAV = 0.72)
  • Suntec REIT (price/NAV = 0.72)
  • Far East Hospitality Trust (price/NAV = 0.73)

• Highest distribution yield REITs (ttm)
  • First REIT (11.09%)
  • Prime US REIT (7.93%)
  • IREIT Global (7.80%)
  • Elite Commercial REIT (7.29%)
  • Sasseur REIT (7.26%)
  • Manulife US REIT (7.09%)
  • Reminder that these yield numbers are based on current prices taking into account delayed distribution/dividend cuts due to Covd-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$108.4bn
  • Increased from S$106.1bn in June 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 5 REITs were also the smallest market capitalisation REITs in the March-May 2021 update.

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: The financial ratio are based on past data and there are lagging indicators.
• Note 2: This REIT table takes into account the dividend cuts due to the Covid-19 outbreak. Yield is calculated trailing 12 months (ttm), therefore REITs with delayed payouts might have lower displayed yields, thus yield displayed might be lower.
• Note 3: All REITs have been updated with the latest Q1 2021 business updates.

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

• Price/NAV increased to 1.06
  • Was 1.03 in June 2021.
  • Singapore Overall REIT sector is slightly overvalued 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 5.16%
  • Decreased from 5.32% in June 2021.
  • 8 of 38 (21%) Singapore REITs 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 remained at 37.68%. 
  • Remained at 37.68% in June 2021.
  • Gearing ratios are updated quarterly. No business updates have been made since the last monthly update.
  • 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.