OREANDA-NEWS. The Singapore Exchange (SGX) lists 28 Real Estate Investment Trusts (REITs) and six stapled trusts. Seven of these are classified as Industrial REITs according to the Global Industry Classification Standards (GICS®).

Industrial REITs are companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of industrial properties, which include warehouses and distribution properties.

The five Industrial REITs that reported quarterly earnings last week have a combined market capitalisation of S\\$13.3 billion, and trade at an average price-earnings ratio of 12.7. In the year thus far, they averaged a price gain of 0.6%, with dividends boosting total returns to 4.7%. Over the last 12 months, they averaged dividend-adjusted total returns of 5.8%.

The five trusts also maintain an average dividend yield of 6.8%. This compares with the benchmark Straits Times Index’s dividend yield of 3.4% and the Singapore Fixed Income (SFI) Index yield of 2.99%.

For the quarter ended June 30, 2015, the five trusts averaged a distribution per unit (DPU) of 2.36 Singapore cents, up an average 1.9% from the year-ago period. Ascendas REIT posted the highest DPU of 3.84 cents, reflecting year-over-year growth of 5.5%, while Cambridge Industrial Trust had the lowest DPU of 1.23 cents, down 2.1% from the year earlier period.

These trusts averaged a 4.1% increase in net property income to S\\$59.1 million, while gross revenue rose an average 7.3% to S\\$79.3 million. Cambridge Industrial Trust posted the strongest growth in both net property income and gross revenue with year-on-year increases of 9.9% and 13% respectively. Cache Logistics Trust registered a 5.4% fall in net property income, while gross revenue rose 3.7%.

On average, the five REITs had an aggregate leverage ratio of 34.9% as of the quarter ended 30 June. This compares with an average of 34.3% in the three months ended March 31. Interest cover for the five trusts averaged 6.2 times in the June quarter, compared with an average of 6.7 times in the March quarter.

Among the five trusts, those with the highest leverage ratios in the June quarter were Cache Logistics Trust and Cambridge Industrial Trust at 38% and 37.2% respectively. Mapletree Industrial Trust and Mapletree Logistics Trust had the lowest leverage ratios at 30.0% and 34.4% respectively.

Mapletree Logistics Trust’s leverage ratio is expected to jump to 38.2%, after taking into account recent acquisitions, the trust said in a statement. It announced three acquisitions – in South Korea, Vietnam and Australia – in the March quarter. The first two have been completed, while the third will be completed by August 2015.

Meanwhile, the outlook for industrial properties remains challenging, Cache Logistics Trust and Ascendas REIT said in their results statements. With significant new supply coming onstream and more stringent government regulations in place, occupancy growth rates may face downward pressure, they added.

In the second half of this year, rents for prime multi-user industrial space are likely to ease further, while that for business parks and independent high-specification industrial premises could see a marginal rise as new supply is likely to be limited, Mapletree Industrial Trust said in its results statement.

Mapletree Logistics Trust also said in a statement its customers are generally cautious about capacity expansion, although demand for logistics space has remained stable.

Ascendas Real Estate Investment Trust

Ascendas Real Estate Investment Trust invests in business and science park properties, industrial properties/data centres, light industrial properties/flatted factories, logistics & distribution centres, as well as warehouse retail facilities within Singapore and China. The company was formed on October 9, 2002 and is based in Singapore.

Mapletree Logistics Trust

Mapletree Logistics Trust invests in logistics properties and other real estate-related assets. The company’s properties include oil and chemical logistics, free trade and non free trade zone third party logistics, food and cold storage, distribution centres, and industrial warehousing. Its portfolio includes 70 properties in Singapore, Hong Kong, China, Malaysia, and Japan. The company was formed in 2004 and is headquartered in Singapore.

Mapletree Industrial Trust

Mapletree Industrial Trust holds a portfolio of 70 properties, which include business park buildings, flatted factories, stock-up/ramp-up buildings, light industrial buildings, and warehouses. The company was formed in 2008 and is based in Singapore.

Cambridge Industrial Trust

Cambridge Industrial Trust invests directly or indirectly in income-producing real estate and real estate assets primarily for industrial and warehousing purposes. Its portfolio includes 50 properties. The company was formed on March 31, 2006 and is based in Singapore.

Cache Logistics Trust

Cache Logistics Trust invests in logistics and warehouse assets across Asia Pacific. The company was formed on February 11, 2010 and is based in Singapore.