These 2 REITs Are Trading Near Their 52-Week Lows

One of the more popular types of investments in Singapore is the real estate investment trust. Right now, there are over 30 REITs in the local stock market that invest across a wide variety of real estate sectors.

Some of the greatest investors around – good examples are John Neff and Walter Schloss – look at lists of stocks that have fallen hard for potential investing ideas. They believe that some beaten-down stocks may be bargains in relation to their actual economic worth.

Nearly once every week, I run a screen to look for companies in Singapore’s market that are near 52-week lows. In most weeks, REITs will appear on my screen.

So, let’s take a closer look at two REITs I’ve chosen at random from a list of REITs that have unit prices near their respective 52-week lows. The duo are: Frasers Hospitality Trust (SGX: ACV) and Cache Logistics Trust (SGX: K2LU).

Source: SGX StockFacts

Fraser Hospitality Trust is technically not a real estate investment trust – it is a stapled trust that consists of a real estate investment trust and a business trust. It has a focus on owning hotels and serviced residences, as its name suggests.

Right now, the trust has 16 properties in its portfolio and they are located in nine cities across Asia, Australia, and Europe.

Two weeks ago, Frasers Hospitality Trust reported its full-year results for its fiscal year ended 30 September 2016 (FY2016). The trust saw an increase in gross revenue, net property income, and distributable income of 17.1%, 20.6%, and 10%, respectively, for the year. But, the trust’s distribution per unit had declined by 10.1% due to an expansion in its unit count stemming from a recent rights issue.

The second REIT on the list is Cache Logistics Trust, a real estate investment trust that focuses on investing in real estate used for logistics purposes in the Asia-Pacific region.

Cache Logistics Trust’s portfolio currently comprises 19 logistics warehouses that are “strategically” located in established logistics clusters in Singapore, Australia, and China.

The REIT’s latest results were released in late October and were for the three months ended 30 September 2016. For the quarter, Cache Logistics Trust reported strong growth in both its gross revenue and net property income – the two numbers had climbed by 21.2% and 17.5%, respectively. But in a similar manner to Frasers Hospitality Trust, Cache Logistics Trust’s distribution per unit had declined in the reporting quarter.

A Foolish summary

Though the REITs mentioned above are trading near their respective 52-week lows, there is no guarantee that their unit prices will not fall further.

What is important is the business performance of the REITs going forward. Some important areas for investors to look at with the REITs before coming to an investment decision include their property profiles, debt profiles, and quality of management.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.