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4 Things You Should Know About China-Based Singapore REITs Now

There are 34 REITs, seven stapled trusts and three property trusts with a combined market capitalisation of over S$100 billion listed on the Singapore stock exchange. As a group, real estate investment trusts (REITs) are a popular investment vehicle among Singapore investors, especially for those who seek regular dividends.

But did you know that out of the 34 REITs, 10 of them have revenues originating from China and together possesses a total market cap of S$20 billion?

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In this article, we will look at four of the most interesting things about these REITs (from an SGX report) that investors might have missed.

Market-beating returns

These 10 China-related REITs averaged a total positive return of +15.7% year-to-date in 2019, bringing their one-year and three-year total returns to +10.9% and +24.5%, respectively.

The above returns came in stronger than the Straits Times Index (SGX: ^STI) which delivered one-year and three year returns of -5.7% and +14.6%, respectively.

Top performers

Not all China-based REITs are created equally though. Below are the top five best-performing REITs year-to-date along with their percentage gains in 2019 (as of 6 June).

  1. Sasseur Real Estate Investment Trust (SGX: CRPU)+29.2%
  2. Mapletree Logistics Trust (SGX: M44U)+24.9%
  3. Mapletree North Asia Commercial Trust (SGX: RW0U)+22.9%
  4. Ascott Residence Trust (SGX: A68U)+20.7% and;
  5. Capitaland Retail China Trust (SGX: AU8U)+17.1%.

Comparatively, the STI index was up by about 5% during this period.

Worst performers still did alright

Two of the worst performers in this China group year-to date are Dasin Retail Trust (SGX: CEDU) and BHG Retail REIT (SGX: BMGU). Yet, their performance wasn’t actually that that bad. The former delivered +4.8% returns while the latter achieved +2.0% during the period.

Valuations not expensive

Another thing worth paying attention to here is that as a group, these REITs have a rather attractive valuation. According to SGX’s report, the group averaged a 12-month indicative dividend yield of 6.7% and a price-to-book (PB) ratio of 0.8.

Comparatively, the average dividend yield and PB ratio of all Singapore REITs (based on OCBC Weekly S-REITs Tracker) are 6.6% and 1.01, respectively. In other words, these REITs are not expensive despite delivering market-beating returns this year.

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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. The Motley Fool Singapore has recommended shares of Mapletree Logistics and Capitaland Retail China Trust.