SGX: Office REITs complete first quarter earnings reports this week
OREANDA-NEWS. A Commercial Real Estate Investment Trust (REIT) is one that primarily invests in office space. They are one of nine REIT types classified by the Global Industry Classification Standard (GICS®). According to GICS®, Commercial REITs comprise companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of office properties.
Singapore Exchange (SGX) lists six GICS® categorised Commercial REITs. They are CapitaCommercial Trust, Keppel REIT, Frasers Commercial Trust, OUE Commercial Real Estate Investment Trust and IREIT Global in addition to Viva Industrial Trust.
Given Via Industrial Trust’s business parks are for primarily industrial use rather than office space, they were included in the recent Industrial REITs piece here. Together, the remaining five REITs have a combined market capitalisation of S\$10.9 billion, and generated an average year-to-date total return of 2.2%. They also maintain an average dividend yield of 5.8%.
The newest addition to the group is IREIT Global, which was listed on SGX in August last year. IREIT Global is the first SGX-listed Commercial REIT focusing only on real estate in Europe. The trust will report its first-quarter results for the financial period ended 31 March 2015 after trading hours on Thursday, 7 May 2015. OUE Commercial REIT will also announce its first-quarter financial results ended 31 March 2015 after trading hours tomorrow, 6 May 2015.
The table below details the five relevant REITs, sorted by market capitalisation.
Company Name | SGX Code | Mkt Cap S\$M | % Price Change YTD | % Change – Div. Adj. YTD | % Price Change [Jan - Apr] | % Change - Div. Adj. [Jan - Apr] | % Change - Div. Adj. [1 Year] | % Div. Yield |
CapitaCommercial Trust | C61U | 4,983 | -3.7 | -1.5 | -3.4 | -1.2 | 9.0 | 5.0 |
Keppel REIT | K71U | 3,876 | 0.0 | 1.6 | 0.8 | 2.5 | 6.9 | 6.5 |
Frasers Commercial Trust | ND8U | 1,033 | 7.1 | 10.6 | 6.7 | 10.2 | 25.1 | 6.1 |
OUE Commercial Real Estate Investment Trust | TS0U | 711 | 1.2 | 4.8 | 1.2 | 4.8 | 9.4 | - |
IREIT Global | UD1U | 347 | -7.3 | -4.5 | -7.3 | -4.5 | - | - |
Average | -0.5 | 2.2 | -0.4 | 2.4 | 12.6 | 5.8 |
Source: SGX (Data as of 4 May 2015)
* Viva Industrial Trust has been excluded from the list as its business parks are mostly for industrial use.
CapitaCommercial Trust
CapitaCommercial Trust is a publicly owned real estate investment fund. The fund invests in real estate and real estate-related assets, which are primarily used for commercial purposes in Singapore. Its portfolio primarily consists of office buildings.
CapitaCommercial Trust has a market capitalisation of S\$5.0 billion and the stock trades at a P/E ratio of 11.7. The five biggest substantial shareholders are CapitaLand Limited, CBRE Clarion Securities, Capital Research and Management Company, CapitaCommercial Trust Management Ltd. and Sumitomo Mitsui Trust Asset Management Co., Ltd..
On 22 April 2015, the company reported their gross revenue for the first quarter ended 31 March 2015, increased by 6.5% or S\$4.2 million year-on-year to S\$68.2 million. The company attributed the increase to positive rent reversions and/or occupancies of CCT properties.
Keppel REIT
Keppel REIT is a real estate investment trust launched by and managed by Keppel REIT Management Limited. The fund invests in the real estate markets of Singapore and across Asia. It primarily invests in commercial properties. The fund was formerly known as K-REIT Asia. Keppel REIT was formed on April 28, 2006 and is domiciled in Singapore.
Keppel REIT has a market capitalisation of S\$3.9 billion and the stock trades at a P/E ratio of 9.9. The five biggest substantial shareholders are Keppel REIT Investment Pte. Ltd., BNY Mellon Asset Management, Prudential Investment Management, Inc., DBS Group Holdings Limited, Asset Management Arm and State Street Global Advisors, Inc..
On 13 April 2015, the company reported its DPU for the first quarter ended 31 March 2015 increased by 13% quarter-on-quarter to 1.70 cents. The higher DPU was attributed mainly to a full-quarter contribution from the one-third stake in MBFC Tower 3, which saw share of results of associates rise over 26% q-o-q and 27% y-o-y to reach \$20.4 million in 1Q 2015, as well as stronger performance from Bugis Junction Towers, which contributed to the improvement in both property income and net property income.
Frasers Commercial Trust
Allco Commercial Real Estate Investment Trust invests in a diverse portfolio of real estate and real estate-related assets, primarily focusing on office and retail properties. It owns properties in Singapore, Japan, and Australia. The company was founded in 2005 and is based in Singapore. The registered name of Allco Commercial REIT has changed to Frasers Commercial Trust since its 17.7% stake acquisition by Frasers Centrepoint Ltd.
Frasers Commercial Trust has a market capitalisation of S\$ 1.0 billion and the stock trades at a P/E ratio of 11.1. The five biggest substantial shareholders are Frasers Centrepoint Limited, Frasers Centrepoint Asset Management (Commercial) Ltd., Mizuho Asset Management Co., Ltd., First Eagle Investment Management, LLC and Teachers Insurance and Annuity Association College Retirement Equities Fund.
On 23 April 2015, the company reported its gross revenue for the first quarter ended 31 March 2015 increased by 22% to S\$34.8 million year-on-year. This is mainly attributed to higher gross revenue from Alexandra Technopark, following revenue recognition from the leases with the underlying tenants following the expiry of the master lease on 25 August 2014.
OUE Commercial Real Estate Investment TrustOUE Commercial Real Estate Investment Trust invests in a portfolio of commercial real estate properties in the financial and business hubs of Singapore and internationally. Its properties are primarily used for office and/or retail purposes. The company also invests in real estate-related assets. Its portfolio comprises 2 commercial properties located in Singapore and Shanghai with an aggregate gross floor area of approximately 105,296.1 square meters. OUE Commercial Real Estate Investment Trust was incorporated in 2013 and is based in Singapore.
OUE Commercial Real Estate Investment Trust has a market capitalisation of S\$ 711.0 million and the stock trades at a P/E ratio of 3.0. The five biggest substantial shareholders are OUE Limited, Tong, Jinquan, Lion Global Investors Limited, Phillip Securities Pte Ltd, Asset Management Arm and Thio, Gim Hock. OUE Commercial REIT will release its first-quarter results ended 31 March 2015 on Wednesday, 6 May 2015 after trading hours.
IREIT Global
IREIT Global is the first SGX-listed REIT established with the strategy of principally investing, directly or indirectly, in a portfolio of income-producing real estate in Europe, which is used primarily for office purposes, as well as real estate-related assets. IREIT Global listed on SGX on 13 August 2014.
IREIT Global has a market capitalisation of S\$ 346.9 million. The five biggest substantial shareholders are Tong, Jinquan, Lim, Chap Huat, Chan, Lian Chin, Lew, Foon Keong and Ng, Lay Hoon. IREIT Global will release its first-quarter results ended 31 March 2015 on Thursday, 7 May 2015 after trading hours.
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