REIT-TIREMENT - REIT Investing and Personal Finance

A blog about REIT investment and personal finance

Thursday, September 17, 2020

Singapore Office Focused SREITs - KREIT vs MCT vs OUECT vs Suntec

Similar to the previous post of Singapore Retail Focused SREITs/BizTrust, this time let's compare office focused SREITs. As there are some numbers of SREITs having properties in multiple sectors, so the criteria for this comparison are: 1) major sector to be Office, 2) major geographical location to be in Singapore and 3) Exclude business park/industrial REITs. CCT is excluded due to merger soon. For mobile user, please view in landscape mode.


Name

Keppel REIT (KREIT)

Mapletree Commercial Trust (MCT)

OUE Commercial Trust (OUECT)

Suntec REIT (Suntec)

 

Basic & Key Statistics

Listed Date

28-Apr-2006

27-Apr-2011

27-Jan-2014

9-Dec-2004

 

Dividend Frequency

Semi-Annual

Semi-Annual

Semi-Annual

Quarter

 

Unit Price

$1.110

$2.000

$0.370

$1.530

 

Dividend Yield

5.05%

3.79%

7.11%

5.23%

 

Price / NAV

0.83

1.14

0.61

0.73

 

Market Cap

SGD 3.76 Billion

SGD 6.62 Billion

SGD 2 Billion

SGD 4.31 Billion

 

Related Parties Shareholding

REIT Sponsor

43.54%

30.00%

47.30%

0.00%

 

REIT Manager

0.89%

2.81%

3.48%

0.54%

 

Directors of REIT Manager

0.05%

0.25%

0.07%

7.56%

 

Lease Profile

Committed Occupancy

98.6%

98.2%

91.6%

98.2%

 

Income in SGD/Major Currencies

93.5%

100.0%

89.7%

100.0%

 

Weighted Average Lease Expiry, WALE

4.6 years

2.6 years

3.5 years

2.95 years

 

Highest Lease Expiry in 5 Years

22.4%

25.8%

33.8%

25.7%

 

Number of Properties

9 units

5 units

7 units

10 units

 

Weighted Average Land Lease Expiry

88.14 years

76.66 years

40.54 years

73.32 years

 

Debt Profile

Gearing Ratio

36.3%

33.7%

40.1%

41.3%

 

Interest Cover Ratio

3.5 times

4.1 times

2.8 times

2.7 times

 

Cost of Debt

2.5%

2.6%

3.1%

2.6%

 

Fixed Rate Debt Proportion

79.0%

73.5%

80.7%

68.0%

 

Unsecured Debt Proportion

71.6%

100.0%

41.6%

81.2%

 

Weighted Average Debt Maturity, WADE

3.6 years

3.9 years

1.8 year

3.35 years

 

Highest Debt Maturity in 5 Years

38.0%

15.0%

29.5%

28.4%

 

Diversification Profile

Top Sector Contribution

97.3%

62.2%

61.4%

73.0%

 

Top Geographical Contribution

72.5%

100.0%

89.7%

82.9%

 

Top Property Contribution

39.5%

39.9%

25.2%

56.9%

 

Top Tenant Contribution

6.2%

8.5%

4.9%

3.5%

 

Top 10 Tenants Contribution

34.7%

27.1%

27.0%

20.3%

 

No. of Countries with Properties/Investments

3 countries

1 country

2 countries

2 countries

 

Key Financial Metrics

Property Yield

3.4%

4.3%

3.4%

2.9%

 

Management Fees over Distribution

24.9%

15.5%

15.3%

22.1%

 

Distribution on Capital

2.7%

2.9%

2.1%

2.3%

 

Distribution Margin

65.6%

47.5%

37.2%

51.1%

 

Distribution from Asset Disposal

8.5%

0.0%

0.0%

5.8%

 

Distribution from Income Support

0.0%

0.0%

13.5%

0.8%

 

Growth Trend for Past 5 Years

DPU

Downtrend

Flat

Downtrend

Downtrend

 

NAV per Unit

Slight Downtrend

Uptrend

Downtrend

Flat

 

Interest Cover Ratio

Flat

Downtrend

Downtrend

Downtrend

 

Property Yield

Downtrend

Downtrend

Downtrend

Downtrend

 

Distribution Margin

Slight Uptrend

Downtrend

Downtrend

Downtrend

 

* Above information is extracted from SREITs Dashboard.

** Growth Trend for DPU is not adjusted for any equity fundraising.

*** Distribution retention would affect financial metrics and growth trends.


Without assigning weightage, just consider favorable points will get:

1) Basic & Key Statistics - OUECT

2) Related Parties Shareholding - OUECT

3) Lease Profile - KREIT

4) Debt Profile - MCT

5) Diversification - KREIT, OUECT & Suntec

6) Key Financial Metrics - MCT

7) Growth Trend - KREIT & MCT

8) Overall - MCT, followed by KREIT

Pure office like KREIT is less affected by COVID, but those hybrid REITs with retail or hospitality portion are affected. Distribution retention will also affect REIT financial metrics and growth trends.


For relative valuation:

Name

Keppel REIT (KREIT)

Mapletree Commercial Trust (MCT)

OUE Commercial Trust (OUECT)

Suntec REIT (Suntec)

52 Weeks

High

$1.290

$2.480

$0.575

$1.940

Low

$0.790

$1.460

$0.280

$1.040

Current

$1.110

$2.000

$0.370

$1.530

Average Yield

High

7.19%

6.34%

9.41%

6.95%

Low

4.49%

1.63%

3.75%

4.13%

Average

5.30%

5.34%

7.13%

5.44%

Current

5.05%

3.79%

7.11%

5.23%

Average Price/NAV

High

0.91

1.33

0.90

0.96

Low

0.65

1.05

0.62

0.67

Average

0.80

1.13

0.70

0.84

Current

0.83

1.14

0.61

0.73

OUECT price is more favorable in terms of relative valuation. Note that13.5% of OUECT past 4 quarters distribution is from income support.


Above is just a quick comparison, you could refer more detail on the individual analysis below:

Keppel REIT Analysis @ 27 July 2020

Mapletree Commercial Trust Analysis @ 5 August 2020

OUE Commercial Trust Analysis @ 6 August 2020

Suntec REIT Analysis @ 16 August 2020


For more information, you could refer:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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