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4 Things Investors Need to Know About Singapore’s REITs

Real estate investment trusts (REITs) have been a favourite among income investors since CapitaLand Mall Trust (SGX: C38U) made its debut in 2002.

A recent SGX report provided insight into the world of REITs. The report also cited an interesting slide from CapitaLand Mall Trust’s investor presentation. The diagram below summarises the asset value and aggregate leverage for the various REITs and business trusts.

Source: CapitaLand Mall Trust’s investor presentation

To learn more about the industry, I picked out a few key points from the report and the slide above (figures as of 21 August 2017, unless otherwise stated):

1. There are 37 real estate investment trusts (REIT) and stapled trusts listed in Singapore. CapitaLand Mall Trust has the largest asset base, closely followed by Ascendas Real Estate Investment Trust (SGX: A17U) and Suntec Real Estate Investment Trust (SGX: T82U)

2. The vast majority of REITs and business trusts have an aggregate leverage ratio that is below 40%. The Monetary Authority of Singapore (MAS) has set a leverage limit of 45% for REITS. There is no leverage limit for stapled securities, even if it has a REIT component.

3. There are two exchange traded funds (ETFs) that are REIT focused, Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYI) and NikkoAM-StraitsTrading Asia ex Japan REIT ETF (SGX: CFA). You can read more about the former here and the latter here. You can find a quick comparison between the two ETFs here

4. The three most recent REITs to be listed are Manulife US Real Estate Investment Trust (SGX: BTOU), EC World Real Estate Investment Trust (SGX: BWCU), and Frasers Logistics and Industrial Trust (SGX: BUOU).

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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 CapitaLand Mall Trust and Singapore Exchange. Motley Fool Singapore contributor Chin Hui Leong owns shares in CapitaLand Mall Trust.