SGX: Singapore’s REIT Sector Averages Distribution Yield of 7.1%

OREANDA-NEWS. Real Estate Investment Trusts (REITs) raise capital to purchase primarily real estate assets, usually with a view to generating income for unit holders of the fund. It allows individual investors to access real property assets and share the benefits and risks of owning a portfolio of property assets, which typically distribute income at regular intervals.

REIT Sector

The MSCI World REIT Index comprises global trusts which generate a majority of their revenue and income from real estate rental and leasing operations. The index has a combined market capitalisation of US\\$767.1 billion. In the 2015 year thus far, the index has generated a total return of 0.7%, and averaged a dividend yield of 4.1%.

In comparison, the 28 REITs and six stapled trusts listed on the SGX have a combined market capitalisation of S\\$58.8 billion. They averaged negative total returns of 5.9% in the year-to-date, while maintaining a dividend yield of 7.1%.

The five highest yielding trusts are Viva Industrial Trust (9.7%), Sabana Shariah Compliant Industrial REIT (9.6%), Lippo Malls Indonesia Retail Trust (9.3%), Cache Logistics Trust (8.7%) and Ascendas Hospitality Trust (8.5%).

Price-to-Book Ratio

The price-to-book (P/B) ratio is used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock/trust by the latest quarter's book value per share. The ratio is a common gauge used by investors to determine whether a firm may be undervalued or overvalued.

Singapore’s 28 REITs and six stapled trusts trade at an average P/B ratio of 0.9, compared to the MSCI World REIT Index, which has a P/B of 1.9.

The table below details the 34 trusts and is sorted by market capitalisation. Note that clicking on a trust’s name will take you to its relevant page on SGX StockFacts.