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5 Things Investors Need to Know About Singapore’s REITs

The SGX S-REIT Index comprises 28 real estate investment trusts (REITs), six stapled trusts, and three property trusts.

recent report by bourse operator Singapore Exchange provided insight into the SGX S-REIT Index, and by extension, the world of Singapore’s REITs. Here are five key things about the REIT index from the report that you may not want to miss (data as of 9 May 2017 unless otherwise stated):

1. The total market cap of the index’s constituents is $73 billion. This gives perspective on the scale of REITs in Singapore.

2. The typical REIT owns a number of property assets that provide rental income. By investing in REITs, investors often get a regular dividend. The average dividend yield for the SGX S-REIT Index’s constituents is 6.6%. The highest yield comes from Sabana Shariah Compliant REIT (SGX: M1GU), which is 10.2%. Although Sabana REIT has a high yield, it has recorded a negative total return of 37.2% over the last three years and is facing persistent questions over its poor business performance.

3. The average total return of the SGX S-REIT Index’s constituents over the past three years is 25.1%. Ascendas India Trust  (SGX: CY6U) is the best performer. The property trust has a three-year total return of 90.1%. The worst performer is Sabana REIT.

4. The largest REIT in the index is Ascendas Real Estate Investment Trust (SGX: A17U). The REIT, which focuses on investing in industrial properties, has a market cap of $7.5 billion. The smallest REIT is Saizen Real Estate Investment Trust (SGX: T8JU) with a market cap of $9 million. Saizen REIT is expected to be liquidated soon.

5. The average price-to-book (PB) ratio for the SGX S-REIT Index’s constituents is 1. Ascendas India Trust is the highest valued trust with a  PB ratio of 1.5. On the other end is Sabana REIT with a PB ratio of just 0.6.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of Singapore Exchange. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.