Is Frasers Centrepoint Trust Singapore’s Best Value Retail REIT?

shoppingThere are 31 REITs and property trusts in Singapore. Of these, eight are REITs that focused on retail businesses. In other words, they are REITs that own and operate retail properties such as shopping malls.

One appealing feature of REITs is their high dividend yields. Singapore’s retail REITs are no exception. The average dividend yield for the eight retail REITs is nearly 6%, which beats the market average by more than a factor of two

Lippo Malls Indonesia Retail Trust (SGX: D5IU) offers the best yield of the bunch. It is just shy of 8%. Trading close to its 52 week low, Lippo Malls share price has not be helped by uncertainty surrounding the recent Indonesian election. Despite its low share price, Lippo Malls is still trading at nearly 15 times earnings. The discount to the book value is 10%.

Wisma and Ngee Ann City are the flagship properties of Starhill Global (SGX: P40U). The REIT, which also owns properties in Kuala Lumpur, Perth, Chengdu and Tokyo, recently announced slight growth in net income. Its yield is 6%.

The company is priced at a 15% discount to its book value and has an earnings multiple of seven, which is around half the current market average. On balance, Starhill Global appear a potential source of value within the retail REITs sector.

Frasers Centrepoint Trust (SGX: J69U) boasts 12 shopping malls in Singapore, all of which are operating at close to full occupancy. FCT, in common with Lippo Malls, is trading at 0.9 times its book value and has a similar yield to Starhill Global at 5.6%. With a PE of around 5.6, which is lower than both Lippo Malls and Starhill Global, FCT could be another good value opportunity.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Adam Kuo doesn’t own shares in any companies mentioned.