Singapore REITs: How Have They Fared in 2015?

Real estate investment trusts (REIT) are a favorite among income investors. But how have REITs actually fared as investments?

Let’s take a look at the latest market summary from bourse operator Singapore Exchange Limited (SGX: S68) for some clues. Published last week, the report summarizes the performance of 35 REITS listed in Singapore. Here are a few interesting points that I have noted:

  1. The average total return for the 35 REITS was a negative 1.9% in 2015. It’s not a good result, but there is a silver lining to this: The Straits Times Index (SGX: ^STI) is down 14.5% for the year.
  2. Keppel REIT (SGX: K17U) was the one bringing up the rear with a negative 20% return. At the other end of the spectrum is Saizen Real Estate Investment Trust (SGX: T8JU), which locked in a 36.1% gain in 2015. The chart topping return from Saizen REIT was driven by the proposed transaction to sell its entire property portfolio in Japan.
  3. The best performer over a three year period from 31 December 2012 to 31 December 2015 was Fortune Real Estate Investment Trust (SGX: F25U). The owner of retail malls in Hong Kong clocked in an annualized return of 19.2% between 2013 and 2015. Mapletree Industrial Trust’s (SGX: ME8U) returns aren’t too shabby either. The REIT produced an annual return of 11.2% during the same timeframe.
  4. There were of course laggards among the REITs. Sabana Shariah Compliant REIT  (SGX: M1GU) has given total negative returns of 7.3% per year from end-2012 to end-2015. The REIT also had a distribution yield of 9.9% (as of 31 December 2015), the highest of the lot.
  5. Speaking of distributions, the big REITs in Singapore were offering pretty good yields too at the end of 2015. Singapore’s largest REIT, CapitaLand Mall Trust (SGX: C38U), weighed in with a 6.2% yield while the second largest REIT, Ascendas Real Estate Investment Trust (SGX: A17U), had a 7.1% yield.

Looking back helps us understand how the REITs have fared over the three years and gives us a clue on which REIT might be worth following over the long-term. This may give us a head-start for our investing homework that follows.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.