BT INVEST

A Personal Finance and Investment Arm of The Business Times
MARKET TODAY:

Archive

SGX S-REIT 20 Index Outperformed Region in March-to-date

By Geoff Howie

SGX S-REIT 20 Index Outperformed Region in March-to-date

  • The SGX S-REIT 20 Index, made up of 20 constituents with a combined market cap of S$52 billion, has generated a 2.0% total return in the month-to-date. This compares to Bloomberg Asia REIT Index which gained 0.5% in SGD basis, over the same period.
  • The Index maintains a dividend yield of 6.3% compared to Bloomberg Asia REIT Index dividend yield of 4.5%. The five highest yielding SGX S-REIT 20 Index constituents have been Cache Logistics Trust (10.3%), OUE Hospitality Trust (9.7%), Lippo Malls Indonesia Retail Trust (9.5%), CDL Hospitality Trusts (8.1%) and Mapletree Logistics Trust (7.6%).
  • Constituents of the SGX S-REIT 20 Index are diversified by location in addition to property type. More than half the trusts have property assets located outside Singapore, mostly around Asia. This includes countries such as China, Hong Kong, Vietnam, Japan, Indonesia, South Korea, Philippines and Malaysia.

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 and is a narrow, tradable and well-diversified portfolio allowing highly efficiency access into the listed REIT segment in Singapore.

Index Methodology

The SGX S-REIT 20 Index is part of a suite of equity indices representing four key segments of the SGX Securities market. As discussed yesterday (click here), the indices are designed to measure the performance of key investable themes in Singapore – real estate; healthcare; mineral, oil and gas (MOG); and maritime & offshore (MOE).

To be eligible for SGX S-REIT 20 Index inclusion, a company’s business sector must be classified as “Residential & Commercial REIT”, as defined by the Thomson Reuters Business Classification (Section 13). Hence a constituent can be either a REIT or Stapled Security.

All eligible companies will be screened for liquidity semi-annually in March and September. Newly listed companies are treated as new constituents, with liquidity screened from the date of listing to the review cut-off dates. Liquidity screening accounts for two parameters:

  1. median daily traded value; and
  2. median free-float market capitalization.

New and existing constituents of the SGX S-REIT 20 Index must meet a minimum daily traded velocity of 0.10% and 0.08% respectively. Daily traded velocity is derived by dividing (i) daily traded value by (ii) free-float market capitalization. Following on from the last rebalance Parkway Life is scheduled to join the SGX S-REIT 20 Index, replacing OUE Commercial REIT on Monday 28 March.

The SGX S-REIT 20 Index, which consists of 20 constituents, have a combined market capitalisation of S$51.8 billion. In the month thus far, the Index has gained 2.0% in total return. This compares to Bloomberg Asia REIT Index which gained 0.5% in SGD basis, over the same period. The Index maintains a dividend yield of 6.3% compared to Bloomberg Asia REIT Index dividend yield of 4.5%.

Source: SGX & Bloomberg (data as of 22 March 2016)

In the year to date the SGX S-REIT 20 Index has generated a total return of 7.2%.

SGX S-REIT 20 Index Subsector Weights

The Index is diversified across types of property assets. The Global Industry Classification Standard (GICS®) is applied by SGX StockFacts to help define the different sectorial focus within the REIT sector. Retail REITs, which are made up of shopping malls, account for the largest index weights. CapitaLand Mall Trust, a retail REIT, was the first of the sector to list in 2002, almost thirty years after Singapore’s first shopping centre became air-conditioned.

The Retail REIT Sector spans businesses engaged in the acquisition, development, ownership, leasing, management and operation of shopping malls, outlet malls, neighbourhood and community shopping centres. Retail REITs are followed by Industrial REITs, Office REITs, Diversified REITs, Hotel & Resort REITs and Residential REITs.

SGX S-REIT 20 Index GICS® Industry Weights

Source: SGX & Bloomberg (data as of 22 March 2016)

Of the 20 constituents, three are part of the Straits Time Index (STI) – Ascendas Real Estate Investment Trust, CapitaLand Commercial Trust and CapitaLand Mall Trust.

SGX S-REIT 20 Index Asia Exposure

Constituents of the SGX S-REIT 20 Index are diversified by location in addition to property type. More than half the trusts have property assets located outside Singapore, mostly around Asia. This includes countries such as China, Hong Kong, Vietnam, Japan, Indonesia, South Korea, Philippines and Malaysia.

Source: SGX

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. The five highest yielding index constituents have been Cache Logistics Trust (10.3%), OUE Hospitality Trust (9.7%), Lippo Malls Indonesia Retail Trust (9.5%), CDL Hospitality Trusts (8.1%) and Mapletree Logistics Trust (7.6%). Of the five, one distributes dividends on a semi-annual basis, and four on a quarterly basis.

The current 20 SGX S-REIT 20 Index constituents are tabled below, and are sorted according to index weight. Clicking on a stock name will take you to its relevant page on StockFacts.

Name SGX Code Index Weight % Market Cap in S$B Total Return YTD % Total Return 3 Yrs % Dvd Ind Yld % Dvd Frequency GICS® Sub Industry Name
CapitaLand Mall Trust C38U 10.9 7.7 14.6 21.6 5.4 Quarterly Retail REITs
Suntec Real Investment Trust T82U 10.7 4.3 11.3 12.5 5.9 Quarterly Diversified REITs
CapitaLand Commercial Trust C61U 10.5 4.4 12.9 8.5 6.0 Semi-annual Office REITs
Ascendas Real Estate Investment Trust A17U 10.2 6.3 7.9 13.7 6.5 Semi-annual Industrial REITs
Mapletree Industrial Trust ME8U 7.1 2.9 7.5 42.0 7.0 Quarterly Industrial REITs
Keppel REIT K71U 6.8 3.2 8.5 -12.2 6.7 Quarterly Office REITs
Mapletree Greater China Commercial Trust RW0U 6.6 2.6 4.9 9.7 7.4 Semi-annual Diversified REITs
Mapletree Logistics Trust M44U 5.8 2.5 3.0 1.0 7.6 Quarterly Industrial REITs
Frasers Centrepoint Trust J69U 4.4 1.8 10.6 12.9 5.9 Quarterly Retail REITs
Starhill Global REIT P40U 4.4 1.7 4.5 5.3 6.7 Quarterly Retail REITs
CapitaLand Retail China Trust AU8U 3.6 1.2 0.4 2.0 7.4 Semi-annual Retail REITs
Mapletree Commercial Trust N2IU 3.4 3.0 10.2 23.7 5.7 Quarterly Retail REITs
CDL Hospitality Trusts** J85 3.3 1.3 2.3 -20.4 8.1 Semi-annual Hotel & Resort REITs
Ascott Residence Trust A68U 2.6 1.6 -5.9 -0.9 7.6 Semi-annual Residential REITs
Cache Logistics Trust K2LU 2.4 0.8 -5.3 -18.8 10.3 Quarterly Industrial REITs
Lippo Malls Indonesia Retail Trust D5IU 2.3 0.9 1.0 -22.1 9.5 Quarterly Retail REITs
Frasers Commercial Trust ND8U 1.7 1.0 5.3 14.6 7.6 Quarterly Office REITs
SPH REIT SK6U 1.3 2.4 2.0 21.0* 5.7 Quarterly Retail REITs
OUE Hospitality Trust** SK7 1.0 1.2 -4.3 -1.3* 9.7 Quarterly Hotel & Resort REITs
OUE Commercial REIT TS0U 1.0 0.8 3.8 3.5* 7.4 Semi-annual Office REITs
Average       4.8 5.8 7.2    

Source: SGX, Bloomberg & SGX StockFacts (data as of 22 March 2016)

*Please note total returns of the stocks are based on returns since their respective IPO date

** Please note constituent is a stapled security

Name SGX Code P/E P/B Last Price in $ 12M High in $ 12M Low in $
CapitaLand Mall Trust C38U 12.8 1.1 2.180 2.280 1.845
Suntec Real Investment Trust T82U 12.0 0.8 1.695 1.895 1.425
CapitaLand Commercial Trust C61U 14.1 0.8 1.475 1.790 1.225
Ascendas Real Estate Investment Trust A17U 14.5 1.2 2.460 2.707 2.090
Mapletree Industrial Trust ME8U 7.3 1.2 1.605 1.640 1.350
Keppel REIT K71U 8.5 0.7 0.990 1.240 0.855
Mapletree Greater China Commercial Trust RW0U 7.0 0.8 0.960 1.100 0.805
Mapletree Logistics Trust M44U 10.6 1.0 1.000 1.260 0.910
Frasers Centrepoint Trust J69U 10.8 1.0 2.010 2.150 1.795
Starhill Global REIT P40U 19.2 0.9 0.775 0.890 0.695
CapitaLand Retail China Trust AU8U 10.6 0.8 1.440 1.780 1.295
Mapletree Commercial Trust N2IU 9.5 1.1 1.410 1.660 1.230
CDL Hospitality Trusts J85 20.6 0.8 1.300 1.780 1.215
Ascott Residence Trust A68U 10.8 0.8 1.060 1.320 1.045
Cache Logistics Trust K2LU N/A 1.0 0.850 1.200 0.805
Lippo Malls Indonesia Retail Trust D5IU 31.8 0.8 0.315 0.375 0.290
Frasers Commercial Trust ND8U 12.2 0.8 1.310 1.580 1.145
SPH REIT SK6U 15.7 1.0 0.960 1.090 0.895
OUE Hospitality Trust SK7 12.5 0.8 0.670 0.921 0.665
OUE Commercial REIT TS0U 9.9 0.5 0.655 0.750 0.555
Average   13.2 0.9      

Source: SGX, Bloomberg & SGX StockFacts (data as of 22 March 2016)

My Gateway & SGX StockFacts

SGX's investor education portal with market, product and investment information and events. Sign up now at sgx.com/mygateway to receive our investment updates and economic calendar.

Whether you are seeking new or established companies to invest in, SGX StockFacts can provide you with the information you need to identify and understand the stocks that best fit your investment strategy. Visit now at sgx.com/stockfacts.

www.sgx.com

Geoff Howie
Geoff Howie

Mr Howie is the Singapore Exchange's Market Strategist - and the key contributor to the educational content and market insights of SGX My Gateway. He is also part of the Associate Faculty at SIM University,  educating students on the fundamentals of investing. 

He previously held lead broking and strategist roles across the Asia Pacific offices of a large international futures broker. Outside of his 15 year career in the financial markets he has also served as the Treasury Adviser to the Leader of the Queensland Liberal Party in Queensland Parliament.

Following High School in Hong Kong, he attended University of Queensland, receiving a Bachelors and Master's degree in Economics, the latter extending into deferred PhD work after receiving the highest grading for first-mover research and modelling conducted on the Shanghai economy.

Mr Howie's other notable achievements include receiving two Hong Kong Securities Institute Outstanding Achievers awards for the 2005 year.