Saturday, April 25, 2015

Singapore Industrial Park REITs Maintain Average 7% Dividend Yield


  • SGX lists seven GICS-categorised Industrial REITs. Including Soilbuild Business Space REIT and Viva Industrial Trust whose business parks are mostly for industrial use, there are a total of nine REITs associated with industrial parks.
  • These nine REITs have a combined market capitalisation of S$17 billion – and include a STI constituent. In the year thus far, the nine REITs generated average total returns of 6.5% and a 4.7% price gains.
  • The three largest capitalised Industrial REITs are Ascendas REIT, Mapletree Logistics Trust and Mapletree Industrial Trust. They averaged a price gain of 7.5% YTD, with dividends boosting total returns to 8.7%. Over the last 12 months, these three trusts averaged a price gain of 13.6%, with dividend-adjusted total returns rising to 20.3%. These three trusts also maintain an average 6.1% dividend yield, double that of the Singapore Fixed Income Index (SFI) at 3.0%.
With reporting season in full swing, the fourth quarter ending 31 March 2015 saw Ascendas REIT achieve a 4.5% year-over-year rise in distribution per unit (DPU) to 3.71 Singapore cents, while Mapletree Logistics Trust posted a 2.1% year-on-year decline in DPU to 1.85 Singapore cents. Mapletree Industrial Trust reported a 5.6% year-on-year rise in its DPU to 2.65 Singapore cents for its fourth quarter ended 31 March.

These three REITs invest in industrial-related properties. An industrial real estate investment trust (REIT) is one of the nine REIT types classified by the Global Industry Classification Standard (GICS®). According to GICS®, Industrial REITs comprise companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of industrial properties. This includes companies operating industrial warehouses and distribution properties.

Singapore Exchange (SGX) lists seven GICS-categorised Industrial REITs. They are Ascendas REIT, Mapletree Logistics Trust, Mapletree Industrial Trust, Cache Logistics Trust, AIMS AMP Capital Industrial REIT, Cambridge Industrial Trust and Sabana Shariah Compliance Industrial REIT. Two other REITs – Soilbuild Business Space REIT (Office REITs) and Viva Industrial Trust (Diversified REITs) – are also associated with the industrial segment, as their business parks are mostly for industrial use.

The nine REITs have a combined market capitalisation of S$16.8 billion, and generated an average and median year-to-date total return of 6.5% and 7.1% respectively. They also averaged a price gain of 4.7% in the year thus far.

Of these nine trusts, the three largest capitalised are Ascendas REIT, Mapletree Logistics Trust and Mapletree Industrial Trust. They have a combined market value of S$12.1 billion, accounting for almost three quarters of the total market capitalisation of the nine REITs.

The three also averaged a YTD price gain of 7.5%, with dividends boosting their year-to-date total returns to 8.7%. This is above the FTSE ST Real Estate Invesment Trust Index’s total return of 6.4% YTD. Ascendas REIT was also the first of the industrial REITs to be listed in Singapore and was included in the Straits Times Index (STI) earlier last year. These three trusts also averaged a dividend yield of 6.1%, double that of the Singapore Fixed Income Index (SFI) at 3.0%.

The table below details the nine REITs sorted according to market capitalisation.
Source: SGX StockFacts (Data as of 23 April 2015)
*Note: Both are included in the list as their business parks are mostly for industrial purposes

Ascendas Real Estate Investment Trust
Ascendas Real Estate Investment Trust is a real estate investment trust launched and managed by Ascendas Funds Management (S). The fund invests in the real estate markets of Singapore and China. It invests in business and science Parks properties, Hi-Specs Industrial properties/Data Centres, Light Industrial properties/Flatted Factories, Logistics & Distribution Centres, and Warehouse Retail Facilities. Ascendas Funds Management (S) was formed on October 9, 2002 and is based in Singapore, Singapore.
Ascendas Real Estate Investment Trust has a market capitalisation of S$6.2 billion and the stock trades at a price-to-earnings ratio of 14.0. It also maintains a dividend yield of 5.6%.
On 7 April 2015, Ascendas Funds Management (S), the manager of Ascendas Real Estate Investment Trust announced that the sale of 26 Senoko Way to JTC Corporation has been completed for S$24.8 million. Following this sale, A-REIT owns 104 properties in Singapore and 2 business park properties in China (clickhere to view more).

Mapletree Logistics Trust
Mapletree Logistics Trust, together with its subsidiaries, operates as a logistics real estate investment trust primarily in Singapore. It invests in a portfolio of logistics real estate and real-estate-related assets. The company’s properties include oil and chemical logistics, free trade and non free trade zone third party logistics, food and cold storage, distribution centre, and industrial warehousing. The company was founded in 2004 and is headquartered in Singapore, Singapore.
Mapletree Logistics Trust has a market capitalisation of S$3.1 billion and the stock trades at a price-to-earnings ratio of 12.8. It also maintains a dividend yield of 6.1%.
On 20 April 2015, the trust released their gross revenue for the quarter ended 31 March 2015, increase by 5.7% or S$4.5 million to S$84.7 million year-on-year. The increase was mainly attributed to contributions from six properties acquired in China, Singapore, Malaysia and Korea during the financial year, contribution from Mapletree Benoi Logistics Hub as well as higher revenue from existing assets in Singapore, Hong Kong and Malaysia (click here to view more).

Mapletree Industrial Trust                   
Mapletree Industrial Trust operates as a real estate investment trust in Singapore. The company was founded in 2008 and is based in Singapore. Mapletree Industrial Trust has a market capitalisation of S$2.8 billion and the stock trades at a price-to-earnings ratio of 7.5. It also maintains a dividend yield of 6.6%.
On 21 April 2015, the trust reported their gross revenue for the quarter ended 31 March 2014, increased by 5.6% or S$4.2 million to S$79.4 million year-on-year. This was due mainly to higher rental rates and occupancies achieved in the Hi-Tech Buildings, Business Park Buildings, and Light Industrial Buildings, as well as revenue contribution from the acquisition of 2A Changi North Street 2 and the completion of the build-to-suit project for Equinix Singapore at 26A Ayer Rajah Crescent (click here to view more).

Source: My Gateway

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