OREANDA-NEWS. Singapore is the largest Real Estate Investment Trusts (REITs) hub in Asia Pacific ex-Japan, with 28 REITs and six Stapled Trusts listed on the Singapore Exchange (SGX). REITs invest in a wide range of diversified real estate assets such as office, residential, retail, hospitality, industrial properties or hi-tech parks

As noted in the recent ARA presentation - Why Invest In REITs and Singapore REITs Market Outlook under Singapore’s Property Funds Guidelines, REITs are required to invest 75% of their deposited property in income-producing real estate. Furthermore, these trusts are required to distribute at least 90% of their taxable income to unit holders in the same year in which the income is derived, providing a regular income stream. Additionally, REITs tend to enjoy a relatively lower cost of equity capital (relative to developers) because they are comparatively lower risk and generate predictable income.

The presentation noted that key risks that REITs are exposed to include interest rate risk, as an increase in the benchmark 10-year yield could put a cap on the increase and cause a drop in REIT unit prices. They also encounter economic risks, as the performance of a REIT is linked to rental income which is dependent on occupancy and rental rates. Lastly, foreign exchange and political risks apply for REITs with overseas assets.

The 10 largest trusts have a combined market capitalisation of S\$ 41.1 billion and an average total return of 5.0% in the 2015 year through to 28 May. This compares to an average total return of 6.4% for all 28 REITS and six Stapled Trusts. The table below is sorted by the market capitalisation of each trust. Note that clicking directly on the stock name below will take you to the relevant profile page on SGX StockFacts.

For the 10 largest trusts, Mapletree Industrial Trust, CapitaLand Mall Trust, and Mapletree Greater China Commercial Trust have recently traded the closest to their 12-month highs. The 10 trusts maintain an average dividend yield of 5.7%, compared to an average of 6.3% for all listed REITS and Stapled Trusts. The average yield compares to the Singapore Fixed Income yield of about 3.0%.

The table below ranks the 10 trusts by the difference between their current prices and 12-month highs.

CapitaLand Mall Trust

CapitaLand Mall Trust invests in income producing retail properties and the real estate markets of Singapore. CapitaLand Mall Trust was founded in October, 2001 and is headquartered in Singapore. It was the first REIT listed on SGX in July 2002. CapitaLand Mall Trust has a market capitalisation of S\$7.7 billion and the stock trades at a price-to-earnings ratio of 12.2.

CapitaLand Mall Trust saw a 1.6% increase in revenue in the first quarter ended 31 March 2015 to S\$167.4 million compared to the first quarter ended 31 March 2014. This growth was accredited to an Asset Enhancement Initiative in September 2014, higher rental achieved on new and renewed leases and staggered rental partially offset by lower occupancy.

Ascendas Real Estate Investment Trust

Ascendas REIT invests in the real estate markets of Singapore and China, and is managed by Ascendas Funds Management Limited. It invests in business and science parks properties, industrial properties, factories, and Warehouse Retail Facilities. Ascendas Funds Management Limited was formed on October 9, 2002 and is based in Singapore. Ascendas REIT has a market capitalisation of S\$6.0 billion and the stock trades at a price-to-earnings ratio of 13.2.

Ascendas REIT saw a 9.8% increase in gross revenue in the financial year ended 31 March 2015 to S\$673.5 million. The increase was mainly due to the recognition of full year rental income earned from properties, contributions from acquisitions, positive rental reversion on renewals, increased occupancy at certain properties, and incentive payment received as income support.

CapitaLand Commercial Trust

CapitaLand Commercial Trust 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. CapitaLand Commercial Trust has a market capitalisation of S\$4.8 billion and the stock trades at a price-to-earnings ratio of 11.1.

CapitaLand Commercial Trust saw a 6.5% year-on-year increase in revenue for the first quarter ended 31 March 2015 to S\$68.2 million The company attributed the increase to positive rent reversions and/or occupancies of CCT properties.

Suntec Real Estate Investment Trust

Suntec REIT is a real estate investment fund managed by ARA Trust Management Limited. The fund invests in real estate and real estate-related assets that are primarily used for retail or office purposes. Suntec REIT was formed on November 01, 2004 and is based in Singapore. Suntec REIT has a market capitalisation of S\$4.5 billion and the stock trades at a price-to-earnings ratio of 14.3.

Suntec REIT saw a 12.9% year-on-year increase in revenue in the first quarter ended 31 March 2015 to S\$74.5 million. The increase was mainly due to the opening of Suntec City mall following the completion of the asset enhancement works and higher revenue achieved by Suntec Singapore Convention & Exhibition Centre.

Keppel REIT

Keppel REIT is a REIT launched by and managed by Keppel REIT Management Limited. The fund invests in the real estate markets of Singapore and across Asia and primarily invests in commercial properties. Keppel REIT was formed on April 28, 2006 and is based in Singapore. Keppel REIT has a market capitalisation of S\$3.8 billion and the stock trades at a price-to-earnings ratio of 9.5.

Keppel REIT saw a 9.4% year-on-year decrease in property income in the first quarter ended 31 March 2015 to S\$42.4 million.

Mapletree Commercial Trust

Mapletree Commercial Trust is a Singapore-focused REIT established with the principal investment objective of investing on a long-term basis, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes, whether wholly or partially, as well as real estate-related assets. Mapletree Commercial Trust has a market capitalisation of S\$3.2 billion and the stock trades at a price-to-earnings ratio of 9.0.

Mapletree Commercial Trust saw a 3.5% year-on-year increase in revenue in the fourth quarter ended 31 March 2015 to S\$71.0 million. This increase was a result of positive contributions from all properties in the portfolio such as VivoCity and PSAB.

Mapletree Logistics Trust

Mapletree Logistics Trust, together with its subsidiaries, operates as a logistics REIT primarily in Singapore. It invests in a portfolio of logistics real estate and real-estate-related assets. The company was founded in 2004 and is headquartered in Singapore. Mapletree Logistics Trust has a market capitalisation of S\$2.9 billion and the stock trades at a price-to-earnings ratio of 10.0.

Mapletree Logistics Trust saw a 5.7% year-on-year increase in revenue in the fourth quarter ended 31 March 2015 to S\$84.7 million. The increase was mainly attributed to contributions from six properties acquired in China, Singapore, Malaysia and Korea during this financial year, contribution from Mapletree Benoi Logistics Hub as well as higher revenue from existing assets in Singapore, Hong Kong and Malaysia.

Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust engages in the investment of various real estate properties for commercial purposes in the Greater China region. It invests in real estate properties for retail and/or office purposes, as well as other real estate-related assets. The company is based in Singapore. Mapletree Greater China Commercial Trust has a market capitalisation of S\$2.9 billion and the stock trades at a price-to-earnings ratio of 8.0.

Mapletree Greater China Commercial Trust saw a 17.4% year-on-year increase in revenue in the fourth quarter ended 31 March 2015 to S\$76.2 million. This increase was mainly due to better rental reversions from new leases signed in the quarter.

Mapletree Industrial Trust

Mapletree Industrial Trust operates as a REIT in Singapore. The company was founded in 2008 and is based in Singapore. The company has a portfolio of 84 properties in Singapore including Flatted Factories, Hi-Tech Buildings, Business Park Buildings, Stack-up/Ramp-up Buildings and Light Industrial Buildings. Mapletree Industrial Trust has a market capitalisation of S\$2.8 billion and the stock trades at a price-to-earnings ratio of 8.4.

Mapletree Industrial Trust saw a 1.6% quarter-on-quarter increase in revenue in the fourth quarter ended 31 March 2015 to S\$79.4 million. The increase was due to the higher occupancies achieved in Business Park Buildings and Light Industrial Buildings, as well as revenue contribution from the completion of the BTS project for Equinix.

SPH REIT

SPH REIT is a REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets. SPH REIT was listed on the SGX on 24 July 2013 and is based in Singapore. SPH REIT has a market capitalisation of S\$2.6 billion and a the stock trades at a price-to-earnings ratio of 13.3.

SPH REIT saw a 2.8% year-on-year increase in revenue in the second quarter ended 28 February 2015 to S\$52.5 million. This was due to the higher rental income achieved by both Paragon and The Clementi Mal.