OREANDA-NEWS. December 29, 2015. SGX recently introduced a series of thematic indices, of which five focus on the broader Real Estate Sector. For more information, click here for the market update - SGX Real Estate Index Priced Below Book Value with Yields Near 6%. The SGX S-REIT 20 Index is an adjusted free-float market capitalization-weighted index that measures the performance of the 20 largest and most tradable REITs listed on SGX.

The 20 REITs have a combined market capitalisation of S\\$48.7 billion, with year-to-date and three-year weighted-average total returns of -5.9% and +6.5% respectively. As of yesterday’s close, they were trading at average P/E and P/B ratios of 10.7 and 0.9 respectively, and maintain a dividend yield of 7.1%.

P/E Ratios

Price-to-earnings (P/E) ratio shows what share price investors are willing to pay for every dollar the company earns. For example, a share price of \\$2.00, with reported earnings of 20 cents per share over a year, would indicate investors are currently willing to accept a P/E ratio of 10. If the share price declined to \\$1.90, then the P/E ratio for the stock would decrease to 9.5.

The five index constituents with the highest P/E ratios are SPH REIT, Ascott Residence Trust, Starhill Global REIT, Ascendas REIT and OUE Hospitality Trust. The five Index constituents with the lowest P/E ratios are Keppel REIT, Mapletree Commercial Trust, Mapletree Industrial Trust, Mapletree Greater China Commercial Trust and Mapletree Logistics Trust. One trust does not maintain a P/E ratio – OUE Commercial Trust. For more information on circumstances, click here.

P/B Ratios

Book value is made up of the stock’s tangible assets net of liabilities (such as debt), and expressed as a function of the shares outstanding. 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 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. The frequency of net asset valuations, additional capital raisings and unit prices are predominant drivers of the P/B ratio.

The five index constituents with the highest P/B ratios are Mapletree Industrial Trust, Ascendas REIT, Mapletree Commercial Trust, CapitaLand Mall Trust and SPH REIT. The five Index constituents with the lowest P/B ratios are CapitaLand Commercial Trust, Mapletree Greater China Commercial Trust, Suntec REIT, Keppel REIT and OUE Commercial REIT.

Dividend Yields

REITs allow 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. Singapore REITS are required to distribute at least 90% of taxable income to the unit holders each year to enjoy tax exempt status by the Inland Revenue Authority of Singapore (IRAS). In the 2015 year thus far, Singapore REITs have distributed approximately S\\$4 billion in dividends.

The five Index constituents with the highest dividend yields are Cache Logistics Trust, Lippo Malls Indonesia Retail Trust, OUE Hospitality Trust, CDL Hospitality Trusts and Frasers Commercial Trust. Of the five, one distributes dividends on a semi-annual basis, and four on a quarterly basis.

The 20 trusts are tabled below, and are sorted according to index weight. Clicking on a stock name will take you to its relevant page on StockFacts.