OREANDA-NEWS. November 13, 2015. 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. Of the 34 listed trusts, nine have been listed over the past three years. The nine recently-listed trusts are: Keppel DC REIT, IREIT Global, Frasers Hospitality Trust, OUE Commercial REIT, Viva Industrial Trust, Soilbuild Business Space REIT, OUE Hospitality Trust, SPH REIT and Mapletree Greater China Commercial Trust.

Listing Framework & Procedures

For a REIT to be listed on the Singapore Exchange, the following criteria must be met:

  • REIT issuers are required to comply with the Securities and Futures Act (Collective Investment Scheme) issued by MAS.
  • The requirements for REIT issuers seeking admission to the Official List of the Exchange are set out in Chapters 2 and 4 of the SGX-ST Listing Manual, which is available online here.
  • Requirements on the contents of a prospectus, offering memorandum or introductory document, which REIT issuers must comply with, are set out in Chapter 6 of the SGX-ST Listing Manual.
  • In addition, issuers should also take note of the Practice Notes issued pursuant to these chapters from time to time. These Practice Notes are published to provide guidance to listed issuers on certain issues encountered in the application of Listing Rules in the relevant corresponding chapters.
  • REIT issuers are advised to solicit legal opinion on the compliance of their REITs with any applicable statutory regulations and also appoint a licensed issue manger in preparing for listing.

Recent Performance

As of Monday’s close, the nine recently-listed trusts traded at an average P/E and P/B ratio of 8.3 and 0.7, and maintained an average indicative dividend yield of 7.2%. In the year through 9 Nov, the nine trusts have averaged a 1.1% total return.

The three best performing trusts in the year through 9 Nov were Keppel DC REIT, Soilbuild Business Space REIT, Mapletree Greater China Commercial Trust, which together averaged a 9.6% total return over the period. Of the nine trusts, OUE Hospitality REIT will be reporting their financial results for the quarter ended 30 Sept today, while IREIT Global will be reporting their financial results tomorrow.

Please note that the stapled securities in the table below are Frasers Hospitality Trust, OUE Hospitality Trust and Viva Industrial Trust.  Securities are referred to as stapled trusts as the one listed security is made up of two trusts - a REIT and a Business Trust.