FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 642.87 to 647.67 (0.75%) compared to last month’s update. Singapore REITs index is currently forming an inverted head and shoulders chart pattern, trading near the support level of a big wedge pattern.
- Short-term direction: Sideways
- Medium-term direction: Sideways
- Long-term direction: Sideways
- Immediate Support: Blue Support Line (Wedge)
- Immediate Resistance: 200D SMA
FTSE REIT Index Chart (2 years)
Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on December 10th, 2024.
The following is the compilation of 38 Singapore REITs with colour-coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio.
- The Financial Ratios are based on past data and these are lagging indicators.
- All REITs have the latest Q3 2024 values.
- I have introduced weighted average (weighted by market cap) to the financial ratios, in addition to the existing simple average ratios. This is another perspective where smaller market cap REITs do not disproportionately affect the average ratios.
Data from REITsavvy Screener. https://screener.reitsavvy.com/
What does each Column mean?
- FY DPU: If Green, FY DPU for the recent 4 Quarters is higher than that of the preceding 4 Quarters. If Lower, it is Red.
- Yield (ttm): Yield, calculated by DPU (trailing twelve months) and Current Price as of January 17th, 2025.
- Gearing (%): Leverage Ratio.
- Price/NAV: Price to Book Value. Formula: Current Price over Net Asset Value per Unit.
- Yield Spread (%): REIT yield (ttm) reference to Gov Bond Yields. REITs are referenced to SG Gov Bond Yield.
As of May 2024, all REITs’ Yield Spread will be referenced to SG Gov Bond Yields, regardless of trading currency.
Price/NAV Ratios Overview
- Price/NAV decreased to 0.88 (Weighted Average: 0.88)
- Decreased from 0.89 in December 2024.
- Singapore Overall REIT sector is slightly undervalued
- Most undervalued REITs (based on Price/NAV)
Manulife US REIT 0.26 Lippo Malls Indonesia Retail Trust 0.30 Keppel Pacific Oak US REIT 0.30 Prime US REIT 0.31 Acrophyte Hospitality Trust 0.31 OUE REIT 0.43
Distribution Yields Overview
- TTM Distribution Yield remained at 6.08%. (Weighted Average remained similar at 6.20%)
- Remained at 6.08% in December 2024. (Weighted Average was 6.19%)
- 17 of 38 Singapore REITs have ttm distribution yields of above 7%.
- Yield Spread tightened to 3.09%. (Weighted Average remained similar at 4.00%)
- Tightened from 3.38% in December 2024. (Weighted Average was 4.01%)
- From May 2024 onwards, all my yield spread measurements are now in relation to SG Gov Bond Yields, no longer a mix with US Gov Bond Yields.
Gearing Ratios Overview
- Gearing Ratio remained at 39.60%. (Weighted Average: 38.76%)
- Remained at 39.60% in December 2024. (Weighted Average: 38.76%)
- Gearing Ratios are updated quarterly. Therefore there are no updates this month.
- S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.
- Highest Gearing Ratio REITs
Manulife US REIT 58.2 EC World REIT 56.1 Prime US REIT 47.8 Elite UK REIT 45.1 Lippo Malls Indonesia Retail Trust 45.0 Acrophyte Hospitality Trust 43.2 MUST and EC World REIT’s gearing ratio has exceeded MAS’s gearing limit of 50%. However, the aggregate leverage limit is not considered to be breached if exceeding the limit is due to circumstances beyond the control of the REIT Manager.
Market Capitalisation Overview
- Total Singapore REIT Market Capitalisation decreased by 0.15% to S$86.21 Billion.
- Decreased from S$86.34 Billion in December 2024.
- Biggest Market Capitalisation REITs (S$m):
Capitaland Integrated Commercial Trust 13198.64 Capitaland Ascendas REIT 11476.17 Mapletree Logistics Tr 6408.42 Mapletree Pan Asia Commercial Trust 6313.20 Mapletree Industrial Tr 6000.84 Frasers Centrepoint Trust 3834.93
- Smallest Market Capitalisation REITs (S$m):
Acrophyte Hospitality Trust 124.70 Lippo Malls Indonesia Retail Trust 130.85 Manulife US REIT 159.65 Elite UK REIT 175.26 Prime US REIT 219.74 BHG Retail REIT 223.43
Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. If you want to know more about investing in REITs, scroll down for more information on the REITs courses.
Refer to the Detail 2024 S-REITs Performance Here.
SG 10 Year Government Bond Yield
- SG 10 Year: 2.99% (increased from 2.70%)
Singapore REITs has temporarily paused at current level (near the support based on chart pattern) amid of the pulling back of the US 10 Risk Free Rate after hitting a new high at 4.80%. There is a strong inverse relationship between the US 10 Year Risk Free Rate vs FTSE ST REIT Index. Singapore REITs sector is expected to be muted as long as US 10 Year Risk Free rate stay at current level.
US 10 Year Risk Free Rate
Fundamentally, the S-REIT sector is trading at a 12% discount to its fair value, with an average trailing twelve-month (TTM) yield of 6.08%.
According to the current Fed Fund Rate projections from the CME Group, the market expects a 25 basis point cut by end 2025, with a total reduction of 100 basis points cut from the peak of the interest rate cycle in 2024. The cut in interest rate will help to boost the DPU of the REITs which have shorter debt maturity profile and higher percentage of floating rate. However, the impact will only be reflected in the financial statement probably in Q2 or Q3 2025.
Kenny Loh is a distinguished Wealth Advisory Director with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.
In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).
With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.
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