So you’ve read all there is to know about Real Estate Investment Trusts (REITs) and you’re ready to invest in them.
So which REIT on the Singapore Exchange should you choose? And what types of REITs are available to invest in? Let’s delve deeper into the various REITs that you can buy.
TL;DR – A Comparison Of Singapore REITs
- Top 5 REITs for Dividend Yield:
- EC World REIT (8.2%)
- Soilbuild Business Space REIT (8.32%)
- Dasin Retail Trust (8.35%)
- First REIT (8.69%)
- Lippo Malls Indonesia Retail Trust (10.35%)
- Top 5 REITs for Return On Equity (ROE):
- Mapletree Commercial Trust (10.88%)
- Parkway Life REIT (13.801%)
- Mapletree North Asia Commercial Trust (15.5%)
- IREIT Global (19.861%)
- Fortune REIT (20.342%)
- Industrial REITs give the highest dividend yield on average
- Industrial REITs have the highest debt-to-equity ratio on average
How Do I Choose A REIT?
There’re many numbers that are involved when it comes to a REIT. For this article, we’re going to look at the following:
1) The Financial Aspect Of The REIT
- Debt-To-Equity Ratio:
A higher Debt-to-Equity ratio indicates a higher default risk for the company. However, it is in the nature of REITs to borrow money to fund their projects, hence, this should not be the only number investors should be looking at. - Return On Equity (ROE):
Measures the profitability of the REITs by revealing how much profit is generated with the money invested. The higher the ROE, the higher the profitability.
2) The Valuation Aspect Of The REIT
- Dividend Yield:
Measures how much dividend a company pays out each year relative to its share price. - Price-To-Book Value:
Measures the market price of share price over the value of company’s assets expressed on the balance sheet. In theory, if the price-to-book value is less than 1, a REIT is trading for less than it’s worth.
REITs In Detail
Healthcare REITs
Hospitals, medical centres, nursing, and retirement homes
Average Dividend Yield:Ā 6.55%
Average ROE:Ā 11.31%
Average Price-To-Book Value:1.23
Average Debt/Equity Ratio:Ā 58.64%Ā
| First REIT | Parkway Life REIT | |
|---|---|---|
| Part 1: Financials | ||
| Debt/Equity Ratio | 57.165% | 60.118% |
| Return On Equity | 8.815% | 13.801% |
| Part 2: Valuation | ||
| P/E Ratio | 10.729 | 11.405 |
| Dividend Yield | 8.69% | 4.41% |
| Price-To-Book Value | 0.898 | 1.555 |
Industrial REITs
Warehouses, industrial parks, and data centres
Average Dividend Yield: 6.66%
Average ROE: 6.36%
Average Price-To-Book Value: 1.11
Average Debt/Equity Ratio: 60.18%
| AIMS APAC REIT | Ascendas REIT | Cache Logistics Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 52.542% | 60.382% | 58.331% |
| Return On Equity | 7.113% | 7.553% | 3.757% |
| Part 2: Valuation | |||
| P/E Ratio | 14.69 | 17.542 | 33.612 |
| Dividend Yield | 7.13% | 5.45% | 7.82% |
| Price-To-Book Value | 1.044 | 1.326 | 0.996 |
| EC World REIT | ESR-REIT | Frasers Logistics & Industrial Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 68.942% | 78.765% | 57.261% |
| Return On Equity | 6.676% | -17.838% | 9.517% |
| Part 2: Valuation | |||
| P/E Ratio | 13.176 | - | 13.36 |
| Dividend Yield | 8.02% | 7.14% | 5.7% |
| Price-To-Book Value | 0.886 | 1.05 | 1.29 |
| Keppel DC REIT | Mapletree Industrial Trust | Mapletree Logistics Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 48.178% | 46.946% | 67.211% |
| Return On Equity | 11.264% | 11.263% | 11.783% |
| Part 2: Valuation | |||
| P/E Ratio | 13.341 | 13.021 | 10.511 |
| Dividend Yield | 4.95% | 5.76% | 5.38% |
| Price-To-Book Value | 1.384 | 1.412 | 1.173 |
| Sabana REIT | Soilbuild Business Space REIT | |
|---|---|---|
| Part 1: Financials | ||
| Debt/Equity Ratio | 59.862% | 63.596% |
| Return On Equity | 11.511% | 7.348% |
| Part 2: Valuation | ||
| P/E Ratio | 6.662 | 13.04 |
| Dividend Yield | 7.57% | 8.32% |
| Price-To-Book Value | 0.732 | 0.92 |
Retail REITs
Mostly shopping malls and freestanding retail
AverageĀ Dividend Yield:Ā 6.63
Average ROE: 7.95%
Average Price-To-Book Value:Ā 0.88Ā
Average Debt/Equity Ratio:Ā 49.54%
| CapitaLand Mall Trust | CapitaLand Retail China Trust | Fortune REIT | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 49.671% | 66.238% | 27.674% |
| Return On Equity | 9.427% | 8.12% | 20.342% |
| Part 2: Valuation | |||
| P/E Ratio | 12.795 | 11.255 | 3.323 |
| Dividend Yield | 4.83% | 6.77% | 5.01% |
| Price-To-Book Value | 1.181 | 0.953 | 0.615 |
| BHG Retail REIT | Frasers Centrepoint Trust | Lippo Malls Indonesia Retail Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 38.379% | 42.26% | 62.743% |
| Return On Equity | 7.856% | 8.799% | 5.423% |
| Part 2: Valuation | |||
| P/E Ratio | 11.264 | 12.874 | 13.281 |
| Dividend Yield | 7.42% | 5.08% | 10.35% |
| Price-To-Book Value | 0.853 | 1.136 | 0.525 |
| Dasin Retail Trust | SPH REIT | |
|---|---|---|
| Part 1: Financials | ||
| Debt/Equity Ratio | 64.503% | 44.871% |
| Return On Equity | -1.412% | 5.072% |
| Part 2: Valuation | ||
| P/E Ratio | - | 21.641 |
| Dividend Yield | 8.35% | 5.19% |
| Price-To-Book Value | 0.622 | 1.14 |
Commercial REITs
Mainly office buildings and management
Average Dividend Yield: 5.90%
Average ROE: 9.36%
Average Price-To-Book Value:Ā 0.88Ā
Average Debt/Equity Ratio: 55.74%
| CapitaLand Commercial Trust | Frasers Commercial Trust | IREIT Global | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 38.238% | 42.922% | 63.223% |
| Return On Equity | 7.847% | 10.586% | 19.861% |
| Part 2: Valuation | |||
| P/E Ratio | 13.745 | 9.177 | 5.084 |
| Dividend Yield | 4.39% | 6.58% | 7.47% |
| Price-To-Book Value | 1.076 | 0.922 | 0.99 |
| Keppel REIT | Mapletree Commercial Trust | Mapletree North Asia Commercial Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 43.058% | 54.934% | 69.436% |
| Return On Equity | 3.016% | 13.796% | 15.5% |
| Part 2: Valuation | |||
| P/E Ratio | 29.29 | 9.541 | 7.019 |
| Dividend Yield | 4.41% | 4.84% | 7.09% |
| Price-To-Book Value | 0.871 | 1.268 | 1.018 |
| Manulife US REIT | OUE Commercial REIT | Starhill Global REIT | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 62.713% | 65.182% | 57.116% |
| Return On Equity | 6.734% | 5.628% | 5.135% |
| Part 2: Valuation | |||
| P/E Ratio | 15.808 | 11.373 | 15.506 |
| Dividend Yield | 6.44% | 6.69% | 6.03% |
| Price-To-Book Value | 1.038 | 0.729 | 0.822 |
| Suntec REIT | |
|---|---|
| Part 1: Financials | |
| Debt/Equity Ratio | 60.537% |
| Return On Equity | 5.516% |
| Part 2: Valuation | |
| P/E Ratio | 18.8 |
| Dividend Yield | 5.1% |
| Price-To-Book Value | 0.929 |
Hospitality REITs
Hospitality related properties like serviced apartments and hotels
AverageĀ Dividend Yield: Ā 6.24%
Average ROE: 4.65
Average Price-To-Book Value:Ā 0.92
Average Debt/Equity Ratio:Ā 58.97%
| Ascott Residence Trust | CDL Hospitality Trusts | OUE Hospitality Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 61.218% | 54.512% | 63.262% |
| Return On Equity | 4.818% | 5.974% | 5.312% |
| Part 2: Valuation | |||
| P/E Ratio | 20.356 | 17.961 | 18.421 |
| Dividend Yield | 6.07% | 5.54% | 6.79% |
| Price-To-Book Value | 0.84 | 1.094 | 0.975 |
| Ascendas Hospitality Trust | Frasers Hospitality Trust | Far East Hospitality Trust | |
|---|---|---|---|
| Part 1: Financials | |||
| Debt/Equity Ratio | 56.296% | 56.034% | 62.511% |
| Return On Equity | 1.92% | 4.304% | 5.548% |
| Part 2: Valuation | |||
| P/E Ratio | 49.031 | 23.057 | 13.882 |
| Dividend Yield | 6.75% | 6.43% | 5.84% |
| Price-To-Book Value | 0.9 | 0.917 | 0.778 |
Other Factors To Consider When Investing In REITs
When it comes to investing, it’s important to really understand what you’re putting your hard-earned money into.
The above numbers in the tables are just some of the most basic information that you can work with when it comes to deciding which REIT to buy.
To really make an informed decision, here are some other numbers and information which you should also familiarise yourself with:
- Distribution per Unit (DPU)
- Funds From Operation (FFO)
- Gearing Ratio
- Interest Coverage
- Occupancy Ratio
- Weighted Average Lease Expiry
They won’t necessarily tell you which REIT will give you an astronomical return on your capital, but they’ll at least give you a better idea of what you’re investing in so you can make an informed decision.
Seedly X ShareInvestor Giveaway
The fifth edition of REITs Symposium, jointly organised by ShareInvestor and REIT Association Singapore, is happening on 18 May 2019 (Saturday) at the Sands Expo and Convention Centre, Roselle Simpor Ballroom, Marina Bay Sands.
At the event, you’ll find more than 75% of REITs represented, and it’s the perfect platform to interact with REIT managers and exhibitors.
New to REITs and want to learn the fundamentals? Be sure to check out the new REITs 101 where you can find out about:
- Investing in REITs vs. physical properties
- Metrics to evaluate a REIT
- How to build a diversified REITs portfolio… And more!
Interested to attend?
Well… We ran a little giveaway for tickets to the REITs Symposium where we got readers to answer a simple question on our Seedly Q&A:
And the winners of the giveaway have been selected! So keep a lookout for a Facebook PM!
Thank you for your answers and for participating!
What If I Missed The Giveaway?
Relax.
The first 30 readers who register for a REITs Symposium Ticket (Public Admission) with the code seedly will receive a special freebie (worth $25) at the event. Public Admission tickets cost $15 for entry only OR $24 for entry and a one-time entry car park coupon.
Mai tu liao (Hokkien: Stop wasting time) and start your REITs investing journey today!
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