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Could Suntec REIT Be Singapore’s Best Value Diversified REIT?

Building_in_SingaporeHaving already looked at the retail, industrial, office and residential REITS  listed on Singapore’s Stock Exchange, there remain only five REITs for further examination.

Of these five remaining REITs, three are classified as diversified REITs and two as healthcare REITs. Neither of the healthcare REITs appears to be good value with both priced above their book value.

Whilst Parkway Life REIT (SGX: C2PU) and First REIT (SGX: AW9U) both continue the trend of REITs offering good yields at 4.5% and 6.6%, respectively Parkway’s high earnings multiple of 15 could discourage many value investors. After all, the market average currently stands at around 14.

First REIT, the owner of several hospitals in Indonesia, Singapore and South Korea could be the better option, though. As well as offering the better yield, its earnings multiple of around 7 means it could look fairly cheap.

Of the three diversified REITs, Soilbuild Business Space REIT (SGX: SV3U) seems to be the least likely to offer value with an above market average PE of 14.6. Its meagre dividend yield of 2.8% is worse than all the other REIT. Additionally, it is value around book value, which little in the way of margin of safety.

The largest of the five remaining REITs, Suntec REIT (SGX: T82U) has the allure of 0.8 times its book value and a dividend yield of 5.2%. However with a high earnings multiple of close to 14, it could be trumped in terms of value by Mapletree Greater China Commercial Trust (SGX: RW0U).

Boasting a PE of just 6.8 and a dividend yield also of 6.8%, whilst trading at 10% below its book value, MGCCT could be one way of gaining exposure to Hong Kong and mainland China on the cheap.

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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.