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12 Things Investors Should Know About The First And Only Asia Pacific REIT ETF

Fund management company Philip Capital had recently introduced the SGX APAC Dividend Leaders REIT ETF, which would start trading in Singapore’s stock market on 20 October 2016.

According to Philip Capital, the ETF would be the first and only ETF that has a focus on Asia Pacific REITs. Here are 12 things investors may want to know about the ETF:

  1. The SGX APAC Dividend Leaders REIT ETF would be tracking the SGX APAC Ex-Japan Dividend Leaders REIT Index.
  2. Philip Capital is targeting a gross yield of 5.07% for the ETF. Distributions will also be doled out semi-annually.
  3. There are 12 eligible countries whose REITs could be included in the ETF, namely, Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand.
  4. As of 30 September 2016, the SGX APAC Ex-Japan Dividend Leaders REIT Index has 59.05% of its constituents from Australia, 29.62% from Singapore, and 11.33% in Hong Kong. You can see that Australia-listed REITs make up the highest concentration in the REIT index.
  5. In fact, eight of the top 10 REITs in the index are from Australia:
    sgx-apac-constituent
    Source: Philip Capital
  6. The top two Australian holdings are Spectre Group and Westfield Corp and they came about due to a complicated restructure of Westfield Group and merger of Westfield Group’s Australian and New Zealand business with Westfield Retail Trust in 2014.
  7. Scentre Group has an interest in 40 Westfield shopping centres located in Australia and New Zealand. These properties have a collective value of A$42.1 billion. As for Westfield Corp, it is similar to Scentre Group in that it owns retail malls too. But, it is worth noting that Westfield Corp holds no property in Australia. In fact, it has 72% of its assets in the United States and 28% in the United Kingdom.
  8. Meanwhile, Stockland brands itself as the largest diversified property group in Australia which develops everything from residential properties to shopping centres to business parks and retirement villages. Vicinity, on the other hand, is a specialist in managing retail assets and has A$23 billion of assets under management.
  9. The fifth largest Australia-listed entity in the SGX APAC Ex-Japan Dividend Leaders REIT Index is the Goodman Group. It has operations in 16 countries across Australia, Asia, and Europe, and deals with industrial and commercial properties.
  10. The representatives from Singapore are amongst some of our local market’s largest REITs. They are Ascendas Real Estate Investment Trust (SGX: A17U) and CapitaLand Mall Trust (SGX: C38U). The two REITs have total assets of S$9.8 billion and S$10.3 billion, respectively.
  11. The REIT with the heaviest weighting in the SGX APAC Ex-Japan Dividend Leaders REIT Index is Link REIT, which is a Hong Kong-listed retail REIT. It also owns car parks, a fresh market, and cooked food stalls in Hong Kong.
  12. As of 30 September 2016, Retail REITs made up 47% of the REIT index. The next three biggest sectors are Diversified at 26%, Industrial at 16%, and Office at 9%. Hospitality and Residential REITs take up a 1% weighting each.

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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 Ong Kai Kiat does not own shares in any companies mentioned.