Ultimate Guide To REITs In Singapore
 
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Ultimate Guide To REITs In Singapore

Ming Feng
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So you’ve read all there is to know about Real Estate Investment Trusts (REITs) and you’re ready to invest in them.

What Are REITs

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: 6.55%
Average ROE: 11.31%
Average Price-To-Book Value:
1.23
Average Debt/Equity Ratio: 
58.64% 

 First REITParkway Life REIT
Part 1: Financials
Debt/Equity Ratio57.165%60.118%
Return On Equity8.815%13.801%
Part 2: Valuation
P/E Ratio10.72911.405
Dividend Yield8.69%4.41%
Price-To-Book Value0.8981.555

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 REITAscendas REIT Cache Logistics Trust
Part 1: Financials
Debt/Equity Ratio52.542%60.382%58.331%
Return On Equity7.113%7.553%3.757%
Part 2: Valuation
P/E Ratio14.6917.54233.612
Dividend Yield7.13%5.45%7.82%
Price-To-Book Value1.0441.3260.996
 EC World REITESR-REITFrasers Logistics & Industrial Trust
Part 1: Financials
Debt/Equity Ratio68.942%78.765%57.261%
Return On Equity6.676%-17.838%9.517%
Part 2: Valuation
P/E Ratio13.176-13.36
Dividend Yield8.02%7.14%5.7%
Price-To-Book Value0.8861.051.29
 Keppel DC REITMapletree Industrial TrustMapletree Logistics Trust
Part 1: Financials
Debt/Equity Ratio48.178%46.946%67.211%
Return On Equity11.264%11.263%11.783%
Part 2: Valuation
P/E Ratio13.34113.02110.511
Dividend Yield4.95%5.76%5.38%
Price-To-Book Value1.3841.4121.173

 Sabana REITSoilbuild Business Space REIT
Part 1: Financials
Debt/Equity Ratio59.862%63.596%
Return On Equity11.511%7.348%
Part 2: Valuation
P/E Ratio6.66213.04
Dividend Yield7.57%8.32%
Price-To-Book Value0.7320.92

Retail REITs

Mostly shopping malls and freestanding retail

Average Dividend Yield:  6.63
Average ROE: 7.95%
Average Price-To-Book Value: 
0.88 
Average Debt/Equity Ratio: 
49.54%

 CapitaLand Mall TrustCapitaLand Retail China TrustFortune REIT
Part 1: Financials
Debt/Equity Ratio49.671%66.238%27.674%
Return On Equity9.427%8.12%20.342%
Part 2: Valuation
P/E Ratio12.79511.2553.323
Dividend Yield4.83%6.77%5.01%
Price-To-Book Value1.1810.9530.615
 BHG Retail REITFrasers Centrepoint TrustLippo Malls Indonesia Retail Trust
Part 1: Financials
Debt/Equity Ratio38.379%42.26%62.743%
Return On Equity7.856%8.799%5.423%
Part 2: Valuation
P/E Ratio11.26412.87413.281
Dividend Yield7.42%5.08%10.35%
Price-To-Book Value0.8531.1360.525
 Dasin Retail TrustSPH REIT
Part 1: Financials
Debt/Equity Ratio64.503%44.871%
Return On Equity-1.412%5.072%
Part 2: Valuation
P/E Ratio-21.641
Dividend Yield8.35% 5.19%
Price-To-Book Value0.6221.14

Commercial REITs

Mainly office buildings and management

Average Dividend Yield: 5.90%
Average ROE: 9.36%
Average Price-To-Book Value: 
0.88 
Average Debt/Equity Ratio:
55.74%

 CapitaLand Commercial TrustFrasers Commercial TrustIREIT Global
Part 1: Financials
Debt/Equity Ratio38.238%42.922%63.223%
Return On Equity7.847%10.586%19.861%
Part 2: Valuation
P/E Ratio13.7459.1775.084
Dividend Yield4.39%6.58%7.47%
Price-To-Book Value1.0760.9220.99
 Keppel REITMapletree Commercial TrustMapletree North Asia Commercial Trust
Part 1: Financials
Debt/Equity Ratio43.058%54.934%69.436%
Return On Equity3.016%13.796%15.5%
Part 2: Valuation
P/E Ratio29.299.5417.019
Dividend Yield4.41%4.84%7.09%
Price-To-Book Value0.8711.2681.018
 Manulife US REITOUE Commercial REITStarhill Global REIT
Part 1: Financials
Debt/Equity Ratio62.713%65.182%57.116%
Return On Equity6.734%5.628%5.135%
Part 2: Valuation
P/E Ratio15.80811.37315.506
Dividend Yield6.44%6.69%6.03%
Price-To-Book Value1.0380.7290.822
 Suntec REIT
Part 1: Financials
Debt/Equity Ratio60.537%
Return On Equity5.516%
Part 2: Valuation
P/E Ratio18.8
Dividend Yield5.1%
Price-To-Book Value0.929

Hospitality REITs

Hospitality related properties like serviced apartments and hotels

Average Dividend Yield:  6.24%
Average ROE: 4.65
Average Price-To-Book Value: 
0.92
Average Debt/Equity Ratio: 
58.97%

 Ascott Residence TrustCDL Hospitality TrustsOUE Hospitality Trust
Part 1: Financials
Debt/Equity Ratio61.218%54.512%63.262%
Return On Equity4.818%5.974%5.312%
Part 2: Valuation
P/E Ratio20.35617.96118.421
Dividend Yield6.07%5.54%6.79%
Price-To-Book Value0.841.0940.975
 Ascendas Hospitality TrustFrasers Hospitality TrustFar East Hospitality Trust
Part 1: Financials
Debt/Equity Ratio56.296%56.034%62.511%
Return On Equity1.92%4.304%5.548%
Part 2: Valuation
P/E Ratio49.03123.05713.882
Dividend Yield6.75%6.43%5.84%
Price-To-Book Value0.90.9170.778

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.

REITs Symposium 2019 REITs
Source: REITs Symposium

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:

Seedly REITs Symposium Giveaway

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!

 

Follow our Seedly communities, be active, and win a 3D2N All-Expense-Paid Trip to Bali for 2!

About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
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