The 10 largest trusts averaged a total return of 5.0% in the 2015 year-to-date and have a combined market capitalisation of S$41.1 billion.
This compares to an average total return of 6.4% in the year-to-date for all 28 REITS and six Stapled Trusts.
Among the 10 largest trusts, Mapletree Industrial Trust, CapitaLand Mall Trust, and Mapletree Greater China Commercial Trust have recently traded closest to their 12-month highs.
Singapore is the largest Real Estate Investment Trusts (REITs) hub in Asia Pacific ex-Japan, with 28 REITs and six Stapled Trusts listed on the Singapore Exchange (SGX). REITs invest in a wide range of diversified real estate assets such as office, residential, retail, hospitality, industrial properties or hi-tech parks
As noted in the recent ARA presentation - Why Invest In REITs and Singapore REITs Market Outlook – click here - under Singapore’s Property Funds Guidelines, REITs are required to invest 75% of their deposited property in income-producing real estate. Furthermore, these trusts are required to distribute at least 90% of their taxable income to unit holders in the same year in which the income is derived, providing a regular income stream. Additionally, REITs tend to enjoy a relatively lower cost of equity capital (relative to developers) because they are comparatively lower risk and generate predictable income.
The presentation noted that key risks that REITs are exposed to include interest rate risk, as an increase in the benchmark 10-year yield could put a cap on the increase and cause a drop in REIT unit prices. They also encounter economic risks, as the performance of a REIT is linked to rental income which is dependent on occupancy and rental rates. Lastly, foreign exchange and political risks apply for REITs with overseas assets.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
0 comments:
Post a Comment