Latest news with #Reits
Business Times
2 days ago
- Business
- Business Times
Phillip Securities initiates coverage on dividend-focused Reit ETF trading at ‘attractive' valuation
[SINGAPORE] Phillip Securities Research has initiated coverage on the Phillip SGX APAC Dividend Leaders REIT ETF (Pareits) with an 'accumulate' call and a target price of S$1.095. In a report released on Wednesday (May 28), Phillip Securities analyst Helena Wang said that the exchange-traded fund (ETF) offers investors stable income at an attractive book value. 'The book value of the ETF has become more attractive in the last two years,' added Wang. 'It historically traded at a high of 1.3 times price-to-book (P/B) ratio but now trades at 0.8 times P/B ratio.' She also noted that Pareits' dividends have steadily increased since 2021, and are now at around four to six Singapore cents per unit. Its dividend yield stands at around 4.4 per cent. Wang expects an improvement in distribution per unit as interest rates decline. The target price of S$1.095 was derived from an equal weighting of two valuation methods. A historical dividend yield spread derived a target price of S$1.22, and a P/B ratio assessment derived a target price of S$0.97. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The ETF tracks 31 real estate investment trusts (Reits) across the Asia-Pacific, excluding Japan. The geographic coverage is largely skewed to Australia, which accounts for 52.5 per cent of the portfolio allocation. Singapore and Hong Kong account for 34.8 per cent and 11.5 per cent, respectively. Some 37.6 per cent of the ETF is allocated in the retail sub-sector, with 29.5 per cent in diversified assets, 13.3 per cent in industrial properties and 10.8 per cent in the office space. The top three holdings of Pareits are Hong Kong's Link Reit at 10.6 per cent, Australia's Scentre Group at 9.8 per cent, and Singapore's CapitaLand Integrated Commercial Trust at 7.6 per cent. 'Pareits tracks the iEdge Apac ex-Japan Dividend Leaders Reit Index, which weighs Reits based on their dividend payout. This makes it the best choice for investors looking for high dividend payments,' Wang said. The ETF is the smallest among the five Reit ETFs listed on the Singapore Exchange, with a fund size of just S$11.9 million as at May 27. It also has the highest expense ratio at 0.95 per cent. The fund is managed by Phillip Capital Management. Both Phillip Capital Management and Phillip Securities Research are part of the PhillipCapital Group. As at 4 pm on Thursday, units of Pareits were trading 6.4 per cent or S$0.007 higher at S$1.097. Year to date, it has generated a total return – with dividends reinvested – of 5.5 per cent. This is broadly in line with the 5.6 per cent total return of the benchmark Straits Times Index over the same period.
Straits Times
3 days ago
- Business
- Straits Times
S'pore retail investors to get expert tips on Reits as the asset class comes back into play
The programme is supported by SGX Group, Reit Association of Singapore and the Securities Association of Singapore. PHOTO: LIANHE ZAOBAO S'pore retail investors to get expert tips on Reits as the asset class comes back into play SINGAPORE – Retail investors can get expert tips on real estate investment trusts as the market for Reits in Singapore heats up with falling interest rates and fresh listings on the horizon. Research analysts, trading representatives and Reit managers will hold 10 sessions under a newly launched educational series on the asset class aimed at enabling retail investors to better understand and assess the risks involved before putting their money into Reits. More than 300 investors, brokers and investment professionals will get to visit Reit properties and understand the assets that they invest in under the six-month programme, which is organised by the Securities Investors Association (Singapore), or Sias. Mr David Gerald, president of Sias, said on May 24: 'Going beyond reading annual reports or attending webinars, investors will now walk through the actual assets, engage the managers, ask questions and understand the fundamentals as part of investor education. Investors will need to understand and assess the risks involved as well when investing in Reits.' The programme is supported by SGX Group, Reit Association of Singapore and the Securities Association of Singapore. Head of equities at SGX Group Ng Yao Loong said SGX sees a healthy Reit IPO pipeline, particularly in emerging sub-sectors like data centres, purpose-built living spaces and logistics assets. Speaking at a Reits symposium on May 24, he noted that the Singapore bourse has emerged as the third-largest Reit listing venue globally by fund-raising, after China and India, in the last five years, adding that SGX is making efforts to ensure that Singapore remains the listing venue of choice for Reits globally. Japan's Nippon Telegraph and Telephone in its earnings release in May said it plans to list its data centre Reit on the SGX in the future. Singapore's Centurion said in a January filing that it is exploring the establishment of a Reit involving some of its workers and student accommodation assets. If the plan materialises, the Reit will be listed on the mainboard of the SGX. Mr Ng also introduced InvestSG, a platform where Reit investors can find sector insights, research, community discussions, market data and model portfolios on Reits, enabling smarter investment portfolio decisions. The platform is slated to be launched in the later part of 2025. Reits are funds that invest in a portfolio of income-generating real estate assets such as shopping malls, offices and hotels. They often take on some debt to buy assets and are subject to an overcall cap on gearing in Singapore. Similar to stocks, Reits are listed on stock exchanges, allowing investors to buy and sell units. With interest rates trending downwards, Reits are expected to benefit in 2025 as borrowing costs decline and investor appetite for income-generating assets grows. RHB Bank analyst Vijay Natarajan in a May 20 report noted that most of the 15 Singapore Reits, or S-Reits, under the bank's coverage reported in-line results for the first quarter, driven by softer interest cost pressures. He said the sharp fall in domestic rates is benefiting the S-Reits, with the majority of them reporting lower overall interest costs. The fall in benchmark rates has also resulted in lower yields for alternative options such as deposit rates, T-bills and Singapore savings bonds, and rising yield spreads for S-Reits – potentially creating room for fund inflows to the sector if the tariff overhang is removed, he added. Mr Ng said Reits stand out as an alternative asset class in times of market volatility, as they exhibit a lower correlation with macro uncertainties as compared to equities and other asset classes. 'As a sector, it is currently trading at a cyclically low valuation of 0.8 time P/B (price-to-book), or around a 20 per cent discount, while offering a forward dividend yield of around 6 per cent,' he said. A P/B ratio of 0.8 time for Reits indicates that the market price of the Reit is 80 per cent of its book value, suggesting that the Reit is trading at a discount to its underlying asset value. He added that Reits not only offer passive rental income, but also exposure to trends such as return-to-office mandates, the rise of artificial intelligence, and evolving consumption patterns. Mr Natarajan of RHB Bank said the direct impact of US tariff policies have been minimal on S-Reits so far, and favours the industrial, office, healthcare, and suburban retail sectors. Hospitality remains his least preferred sector. UOB Kay Hian analyst Jonathan Koh added that several S-Reits, including Frasers Centrepoint Trust, Keppel Reit and CapitaLand Integrated Commercial Trust, reported positive rental reversion, or a positive change in rental rates. 'Singapore is a safe haven due to fiscal discipline and its lowest reciprocal tariff of 10 per cent,' he said. He noted that a favourable rate environment, with a 10-year government bond yield of 2.6 per cent and a three-month compounded Singapore Overnight Rate Average, or Sora, at 2.3 per cent, has helped to boost the attractiveness of Reits, which are now offering yields of 6-7 per cent. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
6 days ago
- Business
- Business Times
BT Money Hacks: Reits and the power of diversification
Smart investors are constantly on the lookout for insightful advice. Particularly in the current landscape in which global bank stocks have recently declined, reflecting trade tensions in global markets. In the latest episode of Money Hacks by The Business Times, host Howie Lim, brings timely insights on the present and future performance of global bank stocks and Singapore Real Estate Investment Trusts (Reits). Speaking with Daphne Tan, head of business development at CMC Markets Singapore, and Ritesh Ganeriwal, managing director and head of investment and advisory at Syfe, she dives deep in search of actionable strategies. The current landscape In Singapore, financial giants such as DBS, OCBC, and UOB saw an average decrease of 1.4 per cent. Moreover, recent US inflation data fell short of expectations, raising concerns about a weakening economic outlook in the United States. The trio explore the potential for Reits to outperform in a muted Singaporean economy due to their attractive dividend yields. They also discuss whether investors should consider shifting their investments from banks to Reits, offering a unique perspective backed by real-time data. Reits recent gains A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Tan mentions that while the STI has shown a 2 to 4 per cent performance year-to-date, Reits have demonstrated an average of 5 to 10 per cent. This episode explains how Reits pre-empt a lower rate environment and the rotation happening in the market. Insights from Ritesh Ganeriwal highlight how Reits face headwinds in rising interest rate environments. He expands on his insights in the podcast. Lim humorously addresses the listener's concern for diversification, ensuring that the advice provided is both trustworthy and practical. Diversification is the new normal Ganeriwal and Tan discuss the importance of a diversified portfolio that includes banks, Reits, and high-quality bonds. They suggest tips on how to balance an income-focused defensive strategy with more growth-orientated tactical approaches, which would apply whether you are a growth investor or seeking stable dividend income. Listen now for help understanding economic cycles, knowing when to pivot investment allocations, and maintaining a balance between banks, Reits, and bonds. Vital strategies shared by the experts. Subscribe to Money Hacks for insights that will empower you to make informed investment decisions, ensuring your portfolio remains balanced and poised for growth. If you have feedback or an idea for a podcast episode, contact us at btpodcasts@ And look out for the next episode with Howie Lim about the shifts in investor appetite for ETF investments. --- Written and hosted by: Howie Lim (howielim@ With Daphne Tan, head of business development, CMC Markets Singapore; and Ritesh Ganeriwal, managing director and head of investment and advisory, Syfe Edited by: Howie Lim & Claressa Monteiro Produced by: Howie Lim & Chai Pei Chieh A podcast by BT Podcasts, The Business Times, SPH Media --- Follow BT Money Hacks podcasts every Monday: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. --- Discover more BT podcast series: BT Correspondents: BT Market Focus at: BT Podcasts at: BT Branded Podcasts at : BT Lens On:
Business Times
6 days ago
- Business
- Business Times
Reit privatisation unsurprising amid higher-for-longer interest rates, but investment opportunities remain: SGX equities head
[SINGAPORE] Real estate investment trusts (Reits) being taken private is unsurprising as the sector is facing some challenges, but investment opportunities are still there for those 'willing to look beyond the surface', said Singapore Exchange (SGX) head of equities Ng Yao Loong on Saturday (May 24). Speaking at the opening of the Reits Symposium at the Suntec Convention Centre, Ng said Reits as an asset class have a 'lower correlation with macro uncertainties as compared to equities and other asset classes', which makes the sector a compelling alternative in market volatility. 'But the Singapore Reit (S-Reit) sector is facing some challenges, and not just from the higher-for longer interest rate environment,' he said. The sector currently trading at a 'cyclically low' valuation of 0.8 times price-to-book ratio, or around 20 per cent discount, and a forward dividend yield of around 6 per cent. 'Perhaps not surprisingly, we see Reits being privatised or in the process of being taken private, such as Paragon Reit and Frasers Hospitality Trust,' he said. Despite this, there could be investment opportunities for investors who look deeper into the sector, noted Ng. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'We see discerning investors gravitate towards well-managed Reits with strong fundamentals. This should be an encouragement to Reit sponsors and managers to do more to manage their asset yield and optimise their capital structure,' he said. He added that privatisation of Reits is 'part and parcel of corporate restructuring to unlock value'. 'We do see a healthy Reit initial public offering pipeline – particularly in emerging sub-sectors like data centres, purpose-built living spaces and logistics assets,' he said. While he did not name companies, one possible Reit in the works could be the upcoming Nippon Telegraph and Telephone (NTT) DC Reit. Japanese-listed NTT said on May 9 that it would be transferring six of its data centre assets to its planned S-Reit for around US$1.6 billion. Investor education Ng also highlighted the importance of investor education, noting the range of resources SGX offers through its channels such as SGX Academy, its website and social media. 'A well-informed investor is essential to fostering a resilient and sustainable financial ecosystem,' he said. One such resource is the newly launched Reits on the Move initiative by the Securities Investors Association (Singapore), or Sias. It is a 10-part educational series that aims to give investors a hands-on educational experience about the S-Reit sector. The sessions will be guided by research analysts, trading representatives and Reit managers, offering investors practical insights into Reit fundamentals, portfolio strategies and the broader investment landscape, said Sias in a separate press statement. The initiative is supported by SGX, the Reit Association of Singapore and the Securities Association of Singapore. It features 12 participating Reits: Aims Apac Reit; CapitaLand Ascendas Reit; CapitaLand Ascott Trust; CapitaLand Integrated Commercial Trust' ESR Reit; Frasers Centrepoint Trust; Keppel Reit; Lendlease Global Commercial Reit; Mapletree Industrial Trust; OUE Reit' Starhill Global Reit and Suntec Reit. More than 300 investors will be given exclusive access to behind-the-scenes tours of Reit-owned properties in Singapore. David Gerald, founder, president and chief executive of Sias, said: 'Going beyond reading annual reports or attending webinars, investors will now walk through the actual assets, engage the managers, ask questions and understand the fundamentals as part of investor education. 'Investors will need to understand and assess the risks involved as well when investing in Reits.' SGX's Ng noted that Reits have different strategies, countries and fundamentals, and 'are not a singular, homogeneous sector'. 'Gems can be found, especially by those who put in the effort to understand the quality of the underlying assets and management,' he added.
Business Times
6 days ago
- Business
- Business Times
Reit privitisation unsurprising amid higher-for-longer interest rates, but investment opportunities remain: SGX equities head
[SINGAPORE] Real estate investment trusts (Reits) being taken private is unsurprising as the sector is facing some challenges, but investment opportunities are still there for those 'willing to look beyond the surface', said Singapore Exchange (SGX) head of equities Ng Yao Loong on Saturday (May 24). Speaking at the opening of the Reits Symposium at the Suntec Convention Centre, Ng said Reits as an asset class have a 'lower correlation with macro uncertainties as compared to equities and other asset classes', which makes the sector a compelling alternative in market volatility. 'But the Singapore Reit (S-Reit) sector is facing some challenges, and not just from the higher-for longer interest rate environment,' he said. The sector currently trading at a 'cyclically low' valuation of 0.8 times price-to-book ratio, or around 20 per cent discount, and a forward dividend yield of around 6 per cent. 'Perhaps not surprisingly, we see Reits being privatised or in the process of being taken private, such as Paragon Reit and Frasers Hospitality Trust,' he said. Despite this, there could be investment opportunities for investors who look deeper into the sector, noted Ng. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'We see discerning investors gravitate towards well-managed Reits with strong fundamentals. This should be an encouragement to Reit sponsors and managers to do more to manage their asset yield and optimise their capital structure,' he said. He added that privatisation of Reits is 'part and parcel of corporate restructuring to unlock value'. 'We do see a healthy Reit initial public offering pipeline – particularly in emerging sub-sectors like data centres, purpose-built living spaces and logistics assets,' he said. While he did not name companies, one possible Reit in the works could be the upcoming Nippon Telegraph and Telephone (NTT) DC Reit. Japanese-listed NTT said on May 9 that it would be transferring six of its data centre assets to its planned S-Reit for around US$1.6 billion. Investor education Ng also highlighted the importance of investor education, noting the range of resources SGX offers through its channels such as SGX Academy, its website and social media. 'A well-informed investor is essential to fostering a resilient and sustainable financial ecosystem,' he said. One such resource is the newly launched Reits on the Move initiative by the Securities Investors Association (Singapore), or Sias. It is a 10-part educational series that aims to give investors a hands-on educational experience about the S-Reit sector. The sessions will be guided by research analysts, trading representatives and Reit managers, offering investors practical insights into Reit fundamentals, portfolio strategies and the broader investment landscape, said Sias in a separate press statement. The initiative is supported by SGX, the Reit Association of Singapore and the Securities Association of Singapore. It features 12 participating Reits: Aims Apac Reit; CapitaLand Ascendas Reit; CapitaLand Ascott Trust; CapitaLand Integrated Commercial Trust' ESR Reit; Frasers Centrepoint Trust; Keppel Reit; Lendlease Global Commercial Reit; Mapletree Industrial Trust; OUE Reit' Starhill Global Reit and Suntec Reit. More than 300 investors will be given exclusive access to behind-the-scenes tours of Reit-owned properties in Singapore. David Gerald, founder, president and chief executive of Sias, said: 'Going beyond reading annual reports or attending webinars, investors will now walk through the actual assets, engage the managers, ask questions and understand the fundamentals as part of investor education. 'Investors will need to understand and assess the risks involved as well when investing in Reits.' SGX's Ng noted that Reits have different strategies, countries and fundamentals, and 'are not a singular, homogeneous sector'. 'Gems can be found, especially by those who put in the effort to understand the quality of the underlying assets and management,' he added.
