REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Wednesday, September 30, 2020

SREITs Fundamental Review @ September 2020

* Above is extracted from SREITs Data
** Ascendas India Trust and Dasin Retail Trust are Business Trust
*** Eagle Hospitality Trust is suspended for trading.

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Dividend Yield

ItemsAverage MedianMinMax
Dividend Yield - Healthcare9.19%9.19%3.21%15.17%
Dividend Yield - Retail7.19%6.69%4.11%16.38%
Dividend Yield - Office6.67%7.16%3.91%9.04%
Dividend Yield - Hospitality5.26%5.68%0%9.5%
Dividend Yield - Industrial5.09%4.68%2.8%8.21%
Dividend Yield - Logistics6.93%7.79%4%8.15%

* Based on REIT Major Sector

The dividend yield is based on annualized past 4 quarters dividends, in which the median dividend yield is 6.64%. The 5 SREITs with highest dividend yield are Lippo Malls Indonesia Retail Trust @ 16.38%, First REIT @ 15.17%, United Hampshire US REIT @ 10.42%, ARA US Hospitality Trust @ 9.5% and IREIT Global @ 9.04%. The 5 SREITs with lowest dividend yield are Eagle Hospitality Trust @ 0% (due to never distribute any distribution), Keppel DC REIT @ 2.8%, Parkway Life REIT @ 3.21%, Mapletree Industrial Trust @ 3.74% and Mapletree Commercial Trust @ 3.91%.

Key Financial Metrics

 ItemsUnit   Average MedianMinMax
Price/ NAVtime0.950.850.172.49
Market Cap, BS$2.351.280.1611.73
Property Yield (Annualized)%5.565.453.138.56
Management Fees over Distribution%14.8213.91029.49
Distribution on Capital (Annualized)%3.433.2705.36
Distribution Margin%45.848.53069.92

* SREITs in Foreign Currencies converted to SGD for Market Cap Comparison

The median Price/NAV is 0.85. The 5 SREITs with highest Price/NAV are Keppel DC REIT @ 2.49, Parkway Life REIT @ 2.14, Mapletree Industrial Trust @ 1.98, Mapletree Logistics Trust @ 1.69 and Ascendas REIT @ 1.47. The 5 SREITs with lowest Price/NAV are Eagle Hospitality Trust @ 0.17, Lippo Malls Indonesia Retail Trust @ 0.29, ARA US Hospitality Trust @ 0.39, First REIT @ 0.45 and Starhill Global REIT @ 0.54

Lease Profile

 ItemsUnitAverage MedianMinMax
Committed Occupancy%95.1496.177.3100
Income Received in SGD/Major Currencies%79.281000100
Highest Lease Maturity in 5 Years%30.4326.40100
Weighted Average Lease Expiry, WALEyear4.924.20.819
Weighted Average Land Lease Expiryyear66.3670.7423.6699

Median committed occupancy is healthy at 96.1%. Sabana REIT, Lippo Malls Indonesia Retail Trust, and Soilbuild Business Space REIT are having an occupancy rate of less than 90%. Sasseur REIT and Frasers Centrepoint Trust are having WALE that less than 2 years.

Debt Profile

 ItemsUnitAverage MedianMinMax
Interest Cover Ratiotime4.533.80.2315.8
Cost of Debt%2.992.790.65.8
Fixed Debt over Total Debt%73.628012.92100
Unsecured Debt over Total Debt%57.8574.260100
Gearing Ratio%36.5736.428.142.5
Highest Debt Expiry in 5 Years%39.2831.213.82100
Weighted Average Debt Expiry, WADEyear2.982.81.515

The median interest cover ratio is healthy at 3.8 times. ARA Hospitality Trust, Dasin Retail Trust, Eagle Hospitality Trust, and EC World REIT are having an interest cover ratio less than 2.5 times. The median gearing ratio is healthy at 36.4%. The 5 SREITs with the highest gearing ratio are ARA Hospitality Trust @ 42.5%, ESR-REIT @ 41.8%, SUNTEC REIT @ 41.3%, ARA Logistics Trust @ 40.4% and OUE Commercial Trust @ 40.1%. BHG Retail REIT, Dasin Retail Trust, First REIT, OUE Commercial Trust, Sabana REIT, and Soilbuild Business Space REIT are having WADE less than 2 years.

Diversification Profile

 ItemsUnitAverage MedianMinMax
Major Sector Contribution%84.669639.4100
2nd Sector Contribution%11.734046.38
3rd Sector Contribution%3.270025.02
Top Geographical Contribution%60.4457.489.1100
Top Property Contribution%25.5520.894.5269.11
Top Tenant Contribution%21.3103.2100
Top 10 Tenants Contribution%48.783617.6100

There are 15 SREITs having its top geographical contribution of more than 75%; 18 having top property contribution of more than 25%; 9 having top tenant contribution of more than 25%, and 11 having top 10 tenants contribution of more than 75%.


SREITs with Financial Engineering/Income Support and Distribution from Disposal 

NameSupport / Distribution Disposal / Distribution 
ARA LOGOS Logistics Trust2% 
Ascendas REIT1.8% 
Ascott Residence Trust 18.2%
BHG Retail REIT4.8% 
CDL Hospitality Trusts 7%
Cromwell European REIT, EUR 2.9%
Dasin Retail Trust29.6% 
Frasers Logistics & Commercial Trust 2.7%
Keppel DC REIT2.9% 
Keppel REIT 8.5%
Lippo Malls Indonesia Retail Trust6% 
Mapletree Logistics Trust 3.3%
OUE Commercial REIT13.5% 
Soilbuild Business Space REIT1.2% 
Suntec REIT0.8%5.8%
United Hampshire US REIT, USD12.8%

*Based on past 4 quarters distribution

From the above, Ascott Residence Trust, Dasin Retail Trust, OUE Commercial Trust, and United Hampshire US REIT are having more than 10% of its distribution from income support or asset disposal. Note that ESR-REIT is quite close to 10% as well.

Generally, SREITs are undervalued in terms of Price/NAV with median at 0.85, especially for the hospitality and retail sectors. The median dividend yield of 6.64% is also attractive in view of the current low interest rate environment. However, note that both DPU and NAV are lagging figures. 

SREITs result announcement for 3Q 2020 is around the corner, you could refer to SREITs Result Date page for their result announcement date.

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