Latest news with #S-Reit
Business Times
25-05-2025
- 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
25-05-2025
- 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.
Business Times
23-04-2025
- Business
- Business Times
Frasers Hospitality Trust undergoes strategic review
[SINGAPORE] Frasers Hospitality Trust (FHT) is undergoing a strategy review, though there is currently no certainty if its existing business strategy will change. This follows a failed privatisation bid made by managers of the stapled group in 2022 and a trading activity surge in November and December 2024, when the stapled security soared around 40 per cent as its trading volume hit highs. The manager said then that it was 'not aware' of reasons for the surge. 'As part of this review, various options (including exploring options with the sponsor of FHT) are being considered to ensure alignment with the interests of stapled securityholders,' the manager said on Wednesday (Apr 23). However, it added that 'there is no certainty or assurance that any transaction in respect of the stapled securities will arise, and the managers may decide to continue with FHT's existing business strategy'. The manager added that it will make announcements in due course, should any material developments that warrant disclosure arise. It urged investors to exercise caution and refrain from taking action with respect to their FHT stapled securities that may be prejudicial to their interests. FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust. 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 Privatisation bid In 2022, a bid to privatise the Singapore-listed real estate investment trust (S-Reit) fell through as it failed to garner sufficient approval from stapled securityholders. The resolution narrowly missed the minimum approval level of votes representing 75 per cent of units required for it to be passed at the September 2022 scheme meeting. It attained favourable votes representing 74.88 per cent of units from around 70.91 per cent of stapled securityholders. In June 2022, Frasers Property Hospitality Trust, a wholly owned subsidiary of FHT's sponsor Frasers Property, proposed to acquire all FHT stapled securities aside from those held by itself, its subsidiaries and TCC Group Investments at a cash consideration of S$0.70 apiece. The proposed privatisation, which would have erased more than S$1.3 billion worth of value from the local bourse if it succeeded then, came after the hospitality-focused S-Reit announced a strategic review of its business earlier in April that year. Challenges FHT faced included difficulty in improving its distribution per stapled security and net asset value amid subdued growth of the hospitality sectors of markets it operates in, alongside the Russia-Ukraine war compounding pandemic-induced supply chain disruptions and raising costs. Stapled securities of FHT ended on Tuesday 1.7 per cent or S$0.01 higher at S$0.60.
