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 properties, which typically distribute income at regular intervals.

The Singapore Exchange lists 28 Real Estate Investment Trusts (REITs) and six stapled trusts. Eight of these are classified as Retail REITs, according to the Global Industry Classification Standards (GICS®).

The four Retail REITs that reported quarterly earnings over the past week have a combined market capitalisation of S$13.3 billion. In the year thus far, they averaged a price decline of 0.4%, with dividends boosting total returns to 4.3%. This brings their one-year and three-year total returns to 5.5% and 19.7% respectively.

For the quarter ended September 30, 2015, the four trusts averaged a distribution per unit (DPU) of 2.63 Singapore cents, reflecting an average 6.8% gain from the year-earlier quarter.

CapitaLand Mall Trust posted the highest DPU of 2.98 Singapore cents, up 9.6% YoY, while CapitaLand Retail China Trust registered the highest YoY percentage increase in DPU – a 12.3% YoY rise to 2.64 Singapore cents.

The four trusts averaged net property income of S$58.8 million, up an average 3.7% year-over-year, and gross revenue of S$83.9 million, up an average 2.3% from the year-ago period.

These Retail REITs averaged a gearing of 31.7% as at 30 September, 2015, versus an average of 31.6% as at 30 June, 2015. Gearing is calculated as the ratio of total outstanding borrowings divided by total assets as at a stated balance sheet date.

Interest coverage for the four trusts averaged 5.9 times as at 30 September, compared with 5.8 times as at 30 June. This ratio is derived from dividing earnings before interest and tax (EBIT) by interest expense.

Among the four trusts, the two with the highest gearing ratios were Mapletree Commercial Trust with 36.4%, and CapitaLand Mall Trust with 33.8%.

Frasers Centrepoint Trust had the highest interest coverage ratio of 7.1 times, followed by CapitaLand Retail China Trust at 6.4 times.

Note that since the categorisation of Retail REITs is based on GICS®, the group does not include the otherwise categorised Diversified REITs, which also invest in retail-related properties.

Financial results for the quarter ended Sept. 30, 2015

Name

Distribution per unit (Singapore cents)

YoY % change

Net Property Income  (S$ '000)

YoY % change

Gross Revenue (S$ '000)

YoY % change
CapitaLand Mall Trust

2.98

9.6

113,280

-0.7

161,664

-1.8
CapitaLand Retail China Trust

2.64

12.3

35,204

9.1

55,296

7.5
Mapletree Commercial Trust

2.02

2.5

54,802

5.1

71,275

1.9
Frasers Centrepoint Trust

2.86

2.7

31,723

1.2

47,479

1.7
Average

2.6

6.8

58,752

3.7

83,929

2.3
Source: Company data            

Debt profiles

Name

 Gearing Ratio (%) as at Sept 30 Gearing Ratio (%) as at June 30 Interest Coverage Ratio as at Sept 30 Interest Coverage Ratio as at June 30
CapitaLand Mall Trust

33.8

33.7

4.8x

4.6x
CapitaLand Retail China Trust

28.5

27.7

6.4x

6.4x
Mapletree Commercial Trust

36.4

36.4

5.1x

5.1x
Frasers Centrepoint Trust

28.2

28.7

7.1x

6.9x
Average

31.7

31.6

5.9x

5.8x
Source: Company data        

The table below details the four retail REITs, sorted by market capitalisation.

Company Name

Code

Mkt. Cap. (S$ mln)

Px Chg YTD (%)

YTD Total Return

1Y Total Return

3Y Total Return

P/E

Div. Yld.in %

Price vs. 12M High (%)

Price vs. 12M Low (%)
CapitaLand Mall Trust

C38U

7,284

0.5

4.4

8.8

11.4

13.7

5.8

-10.1

11.1
Mapletree Commercial Trust

N2IU

2,932

-1.1

3.1

1.6

31.8

9.2

5.8

-16.0

13.4
Frasers Centrepoint Trust

J69U

1,843

6.1

10.7

9.7

24.9

10.7

5.7

-6.5

9.5
CapitaLand Retail China Trust

AU8U

1,290

-7.1

-1.2

2.0

10.7

10.0

7.0

-20.0

20.0
Average  

 

-0.4

4.3

5.5

19.7

    

 

 
Source: SGX StockFacts (data as of 23 October, 2015)                

CapitaMall Trust

CapitaMall Trust (CMT) is a publicly owned real estate investment arm of CapitaLand Ltd. The firm invests in income producing retail properties. It invests in the real estate markets of Singapore. CapitaMall Trust was founded in October, 2001 and is based in Singapore. CapitaMall Trust has a market capitalisation of S$ 7.7 billion and the stock trades at a price-to-earnings ratio of 12.4. The five substantial shareholders are Pyramex Investments Pte Ltd., CapitaLand Limited, Singapore Labour Foundation, Endowment Arm, BlackRock, Inc. and Alphaplus Investments Pte Ltd.

CapitaRetail China Trust

CapitaRetail China Trust operates as a real estate investment trust in Singapore. It invests in a portfolio of retail real estate properties located primarily in the People’s Republic of China, Hong Kong, and Macau. The trust’s portfolio include eight shopping malls located in Beijing; Shanghai; Zhengzhou, Henan Province; Huhhot, Inner Mongolia; and Wuhu, Anhui Province. CapitaRetail China Trust was formed on October 23, 2006 and is based in Singapore. CapitaRetail China Trust has a market capitalisation of S$ 1.4 billion and the stock trades at a price-to-earnings ratio of 9.9. The five substantial shareholders are CapitaLand Limited, HSBC Global Asset Management (UK) Limited, Matthews International Capital Management, LLC, American International Group, Inc., Insurance Investments and Capital Research and Management Company.

Mapletree Commercial Trust

Mapletree Commercial Trust was formed on August 25, 2005 and is based in Singapore. 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$ 3.4 billion and the stock trades at a price-to-earnings ratio of 9.4. The five substantial shareholders are The HarbourFront Pte Ltd., HarbourFront Place Pte. Ltd., Schroder Investment Management Limited, American International Group, Inc., Insurance Investments and NTUC Fairprice Co-operative Limited.

Frasers Centrepoint Trust

Frasers Centrepoint Trust is real estate investment trust launched and managed by Frasers Centrepoint Asset Management Ltd. It invests in real estate markets across the globe. The fund primarily invests in income-producing properties used primarily for retail purposes. Frasers Centrepoint Trust was formed on June 5, 2006 and is domiciled in Singapore. Frasers Centrepoint Trust has a market capitalisation of S$ 1.9 billion and the stock trades at a price-to-earnings ratio of 10.5. The five substantial shareholders are Frasers Centrepoint Limited, Schroder Investment Management Limited, Schroder Investment Management (Singapore) Ltd, Capital Research and Management Company and Frasers Centrepoint Asset Management Ltd.