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Tuesday, 28 June 2011 03:36

A total of 28 REITs & property trusts were listed in Singapore with a combined value of S$59.7bn, making up 6% of the total market capitalization of traded stocks (with an average return of 12.9% in 2014). S-REITs have raised S$8.3bn in share sales over the last 3 years, with the FTSE Straits Times REIT Index up about 40% in that period, with Mapletree Industrial up almost 50% since its S$853m IPO in late-2010. In early-2013 the Singapore government imposed upto 15% stamp-duty on sellers of industrial properties such as warehouses & logistic buildings to curb speculation, after prices doubled in the past 3 years & outpaced the increase in rents (early-2013).





"The Singaporean REIT (S-REIT) sector started in 1999, after the first set of regulatory guidelines for REITs was issued by the Monetary Authority of Singapore (MAS). S-REITs are subject to the Securities and Future Act (SFA) and the Code on Collective Investment Schemes (CCIS). S-REITs may or may not be listed on the Singapore Exchange (SGX). In July 2002, CapitaMall Trust made a successful debut public offering and became the first SREIT to be listed on the SGX. The following five years saw a wave of new S-REITs, as both developers and investors took advantage of the low interest rate environment. During the period from 2002 to 2007, there were 19 additional S-REITs launched. The industry however suffered in 2008 as the capital market was impacted by the GFC. The market endured a dry spell over the next two years with only one successful listing, the IndiaBulls Properties Trust on June 2008. Since 2011, the market however has become more active, thanks to ample liquidity in the financial system following the implementation of measures to stimulate economic growth. The period over 2010-2011 saw the establishments of 5 new S-REITs, among which were the two heavyweights backed by Temasek; the Mapletree Industrial Trust (raising approx. US$1 billion) and the Mapletree Commercial Trust (raising US$ 1.6 billion). As of June 2012, there were 26 publicly traded S-REITs with an overall market capitalisation of approximate US$31 billion. Singapore is the second largest REIT market in Asia after Japan, accounting for 30.9% of the total size of the regional REIT market. As of June 2012, 9 of the 26 S-REITs were retail REITs, representing almost half (US$14.97 billion) of the S-REIT market capitalization. The industrial sector accounts for 8 S-REITs (US$9.08 billion), corresponding to 29% of the total market capitalisation. S-REITs had a significant profile in terms of portfolio size and market capitalisation. The number of properties ranged from 2 (Indiabulls Properties) to 133 (Saizen REIT), averaging 28 properties per S-REIT. The largest S-REIT, in terms of market capitalisation, was CapitaMall Trust (US$4.6 billion), while the smallest one was Saizen REIT (US$144 million). S-REITs also have a significant position regionally, accounting for 4 of the top 10 Asian REITs, 8 of the top 20 and 16 of the top 50 in terms of market value. It has been considered the best REIT market in Asia consistently for overall potential, property market growth, REIT opportunity and regulatory support (Trust 2011)."

Source: Prof. Alex Anh Khoi Pham - University of Western Sydney: The Development of REIT Markets in Asia (1/1/2014) - Link.


REIT Bubble Chart: Value Selection & Risk Avoidance - Link. These are used to show the "relative" position of S-REITs compared with each other; those to "pick" and to "avoid" based on (1) Under-valued S-REITs with high Distributions to Price / NAV ie "Value Picks"; and (2) Gearing to Price / NAV ie "Risk Avoidance."

Last Updated on Monday, 29 December 2014 03:02