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REITs & Stapled Trusts Averaged 12% total return in 2014 YTD

My Gateway (92 x 92)Investors can gain exposure to local and international real estate assets through Real Estate Investment Trusts (REITs) and stapled securities listed on Singapore Exchange (SGX). These trusts include different types of real estate ranging from shopping malls, office towers, industrial parks, hospitality-related assets and healthcare-related assets.

Investing in REITs allows investors to share the income generated by the tenants of the properties, at the same time bearing the risks associated with the value of the property assets and the costs of financing the property. Hence REITs provide an efficient way to include real estate in one’s investment portfolio.

The 26 REITs and six stapled securities listed on SGX are detailed in the table below. For the 26 REITs, the distributed tenant income through dividends boosted the average total return from 8.7% to 12.6% in the year-to-date. Similarly, the average total return of the six stapled securities was boost to 8.3% on dividend distributions. The total return takes into account the changes in the price of the units in addition to re-invested dividend distributions.

REIT SGX Code Market Cap S$M Px Chg YTD % Total Return YTD % Total Return 12M % Dvd Ind Yld % GICS Sub-Industry Name
CAPITAMALL TRUST C38U 6921 4.7 7.6 2.6 5.4 Retail REITs
ASCENDAS REAL ESTATE INV TRT A17U 5601 6.8 10.3 4.9 6.0 Industrial REITs
CAPITACOMMERCIAL TRUST C61U 5063 15.2 21.5 20.7 5.1 Office REITs
SUNTEC REIT T82U 4600 19.5 23.0 20.2 6.3* Diversified REITs
KEPPEL REIT K71U 3627 8.4 12.1 2.6 5.9 Office REITs
MAPLETREE LOGISTICS TRUST M44U 2924 12.8 16.8 12.9 6.4 Industrial REITs
MAPLETREE COMMERCIAL TRUST N2IU 2898 16.8 20.5 19.5 5.6 Retail REITs
SPH REIT SK6U 2661 8.2 13.2 12.6 5.1 Retail REITs
MAPLETREE INDUSTRIAL TRUST ME8U 2473 8.2 12.3 11.7 6.9 Industrial REITs
MAPLETREE GREATER CHINA COMM RW0U 2442 7.7 11.7 2.3 6.8 Diversified REITs
FORTUNE REIT F25U 2152 13.9 17.5 2.3 5.0 Retail REITs
ASCOTT RESIDENCE TRUST A68U 1941 5.4 8.6 2.7 6.2 Residential REITs
FRASERS CENTREPOINT TRUST J69U 1812 10.8 15.7 6.8 1.3 Retail REITs
STARHILL GLOBAL REIT P40U 1798 6.4 9.7 1.9 5.9 Retail REITs
PARKWAYLIFE REAL ESTATE C2PU 1452 2.6 5.0 2.6 4.7 Health Care REITs
CAPITARETAIL CHINA TRUST AU8U 1294 21.4 25.5 13.1 6.2 Retail REITs
LIPPO MALLS INDONESIA RETAIL D5IU 996 -2.4 0.7 -13.2 6.6 Retail REITs
CACHE LOGISTICS TRUST K2LU 958 10.8 15.0 7.2 7.0 Industrial REITs
FRASERS COMMERCIAL TRUST ND8U 957 12.6 16.3 13.8 6.1 Office REITs
CAMBRIDGE INDUSTRIAL TRUST J91U 942 8.7 12.5 8.7 6.7 Industrial REITs
AIMS AMP CAPITAL INDUSTRIAL O5RU 910 7.1 11.2 0.0 6.8 Industrial REITs
FIRST REAL ESTATE INVT TRUST AW9U 889 16.0 22.3 10.3 6.5 Health Care REITs
SABANA SHARIAH COMP IND REIT M1GU 713 -5.1 0.4 -6.9 7.3 Industrial REITs
OUE COMMERCIAL REIT TS0U 707 2.5 2.5 2.5 N.A. Office REITs
SOILBUILD BUSINESS SPACE REI SV3U 655 5.2 9.4 9.1 7.7 Diversified REITs
SAIZEN REIT T8JU 267 2.2 5.9 7.9 6.8 Residential REITs
Total 57654
Average 8.7 12.6 6.9 6.0
Median 8.2 12.2 7.0 6.2

Source: Bloomberg (data as of 24 July 2014) * note 12 month distribution yield


Stapled Trust SGX Code Market Cap S$M Px Chg YTD % Total Return YTD % Total Return 12M % Dvd Ind Yld % GICS Sub-Industry Name
CDL HOSPITALITY TRUSTS J85 1740 8.8 12.7 12.7 6.2 Hotel & Resort REITs
FAR EAST HOSPITALITY TRUST Q5T 1547 4.8 8.2 -3.3 5.9 Hotel & Resort REITs
OUE HOSPITALITY TRUST SK7 1178 2.3 7.7 7.1 7.5 Hotel & Resort REITs
ASCENDAS HOSPITALITY TRUST Q1P 849 6.2 10.7 -5.2 7.5 Hotel & Resort REITs
VIVA INDUSTRIAL TRUST T8B 486 5.2 9.0 8.3 8.5 Office REITs
Total 6873
Average 4.8 8.3 3.5 7.1
Median 5.0 8.6 4.4 7.5

Source: Bloomberg (data as of 24 July 2014)

Stapled securities consist of different securities that are stapled jointly and traded as one security. An example is CDL Hospitality Trusts, comprising of a REIT (CDL Hospitality REIT) and a business trust (CDL Hospitality Business Trust). The trust component of the stapled entity is managed by a responsible entity who performs the roles as a ‘’trustee” as well as a “manager”. The most recent stapled trust listed on SGX is Frasers Hospitality Trust, which was listed on 14 July 2014.

According to Bloomberg, there are approximately 700 primary lists of REITs around the world. In a recent working paper by Asia Pacific Real Estate Association (APREA) titled ‘The Impact of REITs on Asian Economies’, real estate was maintained to have investment characteristics that are distinct from other major asset classes, being equities and bonds, and so offer diversification benefits to a multi-asset class portfolio. The survey further maintained that Australia, Singapore, Japan and Hong Kong have the region’s most conducive regimes for investments.

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