REIT ETFs: The Ultimate Singaporean Guide to Investing in 'Em
Real estate investment trusts (REITs) pool money from investors like you and me to invest in a portfolio of income-generating real estate assets.
Such assets can range from shopping centres to industrial buildings.
In exchange for our investment in a REIT, we are entitled to distributions at regular intervals, usually on a quarterly basis.
Currently, there are 42 REITs and property trusts listed in Singapore, making our country one of Asia’s largest markets for them.
Source: Singapore ExchangeThere are two main ways to get exposure to the REIT market.
One is by investing in individual REITs and the other is by buying REIT exchange-traded funds (ETFs).
What Are REIT ETFs?
ETF is an investment that tracks the performance of an underlying asset.
In this case, a REIT ETF tracks the performance of a specific REIT index. Here in Singapore, there are five REIT ETFs tracking different indices.
The REIT ETFs listed in our city-state are:
- Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ) (SGX: BYI)
- NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA) (SGX: COI)
- Lion-Phillip S-REIT ETF (SGX: CLR)
- CSOP iEdge S-REIT Leaders Index ETF (SGX: SRT) (SGX: SRU)
- UOB APAC Green REIT ETF (SGX: GRN) (SGX: GRE)
More on the REIT ETFs later, but first…
Why REIT ETFs?
There are four main benefits of investing in REIT ETFs:
- Instant diversification — REIT ETFs allow investors to own a portfolio of REITs in different sectors with a click of a button
- Passive — Investors don’t have to pick and monitor individual REITs, so buying REIT ETFs is an excellent option for time-starved investors
- Low cost — Since investors don’t have to purchase different REITs one-by-one, they save on commission costs that they would have incurred otherwise
- Professional management — REIT ETFs are also professionally managed where there’s automatic rebalancing and corporate actions, such as rights issues, are taken care of on behalf of unitholders
Phillip SGX APAC Dividend Leaders REIT ETF
Of the five REIT ETFs, Phillip SGX APAC Dividend Leaders REIT ETF is the oldest, having been listed on 20 October 2016.
It is also the first-ever ETF focusing on Asia Pacific REITs.
This ETF follows a smart beta strategy that ranks and weights the underlying REITs according to total dividends paid in the last 12 months, with an aim of enhancing returns above that of traditional market-cap weighted ETFs.
Phillip SGX APAC Dividend Leaders REIT ETF, which has 30 constituents, tracks the iEdge APAC ex Japan Dividend Leaders REIT Index.
In terms of geographical allocation, most of the REITs in the ETF are concentrated in Australia, followed by Singapore, and Hong Kong.
With regards to the REIT sector allocation, diversified REITs take up most of the ETF.
The following table shows the top 10 constituents of Phillip SGX APAC Dividend Leaders REIT ETF (data as of October 2021):
REIT Weight Country
Link REIT 9.30% Hong Kong
GPT Group 8.94% Australia
Dexus 6.97% Australia
Stockland 6.60% Australia
Goodman Group 6.35% Australia
Ascendas REIT 6.27% Singapore
Scentre Group 4.91% Australia
Vicinity Centres 4.59% Singapore
CapitaLand Integrated Commercial Trust 4.59% Singapore
Mirvac Group 4.37% Australia
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF is the world’s first Asia ex-Japan REIT ETF, and it tracks the FTSE EPRA Nareit Asia ex Japan Net Total Return REIT Index.
Most of the REITs in the ETF are concentrated in Singapore and Hong Kong.
In terms of REIT industry allocation, retail REITs take up around 37% of the ETF, followed by industrial REITs, and office REITs.
The following table shows the top 10 constituents of NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (data as of October 2021):
REIT Weight Country
CapitaLand Integrated Commercial Trust 10.8% Singapore
Ascendas REIT 9.9% Singapore
Link REIT 9.8% Hong Kong
Mapletree Logistics Trust 6.1% Singapore
Mapletree Industrial Trust 5.4% Singapore
Mapletree Commercial Trust 5.1% Singapore
Frasers Logistics & Commercial Trust 4.5% Singapore
Embassy Office Parks REIT 3.5% India
Suntec REIT 3.3% Singapore
Keppel DC REIT 3.0% Singapore
Lion-Phillip S-REIT ETF
Lion-Phillip S-REIT ETF is Singapore’s first ETF dedicated entirely to Singapore REITs.
This REIT ETF tracks the performance of Morningstar’s Singapore REIT Yield Focus Index.
The index is one of Morningstar’s strategic beta indexes that uses a proprietary three-factor rules-based investment methodology that emphasises 1) business quality; 2) financial health and 3) dividend yield.
Industrial REITs make up most of Lion-Phillip S-REIT ETF’s sector allocation, followed by retail and specialised.
The following pie chart shows the breakdown of the different REIT sectors in Lion-Phillip S-REIT ETF:
Lion-Phillip S-REIT ETF contains 27 high-quality Singapore REITs, and the weight of each REIT is capped at 10%.
As of end-October 2021, the top 10 constituents of the Lion-Phillip S-REIT ETF were:
Ascendas REIT 10.0%
Mapletree Commercial Trust 9.9%
CapitaLand Integrated Commercial Trust 9.7%
Mapletree Logistics Trust 9.6%
Mapletree Industrial Trust 9.5%
Frasers Centrepoint Trust 9.5%
Keppel DC REIT 9.1%
Parkway Life REIT 5.7%
Frasers Logistics and Commercial Trust 3.0%
Manulife US REIT 2.6%
CSOP iEdge S-REIT Leaders Index ETF
The CSOP iEdge S-REIT Leaders Index ETF has an investment objective to replicate as closely as possible, before fees and expenses, the performance of the iEdge S-REIT Leaders Index.
Just like Lion-Phillip S-REIT ETF, the CSOP iEdge S-REIT Leaders Index ETF only focuses on Singapore-listed REITs.
Currently, industrial REITs take up most of CSOP iEdge S-REIT Leaders Index ETF’s allocation, followed by office and retail REITs.
Here are the top 10 REITs that are part of the CSOP iEdge S-REIT Leaders Index ETF (as of end-September 2021):
Mapletree Logistics Trust 10.2%
Ascendas REIT 10.0%
CapitaLand Integrated Commercial Trust 10.0%
Mapletree Industrial Trust 9.4%
Mapletree Commercial Trust 9.2%
Frasers Logistics and Commercial Trust 8.9%
Keppel DC REIT 7.5%
Keppel REIT 5.0%
Suntec REIT 4.1%
Frasers Centrepoint Trust 3.8%
UOB APAC Green REIT ETF
The UOB APAC Green REIT ETF allows investors to invest in high-quality, environmentally-sound real estate assets with growth potential.
The green REIT ETF aims to replicate the iEdge-UOB APAC Yield Focus Green REIT index, which contains 50 REITs listed across the Asia-Pacific region.
The index has a specific focus on yield and a weighting method that’s tilted toward the environmental attributes of real estate properties.
Here’s a breakdown of the REIT sectors for the ETF:
In terms of geographical breakdown, Japan takes up most of the index at 40%, followed by Australia (36%), Singapore (16%), and Hong Kong at 8%.
The table below shows the 10 largest constituents of UOB APAC Green REIT ETF, as of 30 September 2021:
Constituent Weight Country
Scentre Group 7.45% Australia
Dexus 7.09% Australia
Mirvac Group 6.81% Australia
Link Real Estate Investment Trust 6.70% Hong Kong
Nippon Building Fund, Inc. 6.50% Japan
Stockland 6.08% Australia
GPT Group 4.97% Australia
Japan Real Estate Investment Corp. 4.62% Japan
CapitaLand Integrated Commercial Trust 4.26% Singapore
Mapletree Logistics Trust 2.51% Singapore
Comparison of the REIT ETFs
Here’s a quick comparison of the five REIT ETFs that we just discussed:
Phillip SGX APAC Dividend Leaders REIT ETF NikkoAM-StraitsTrading Asia Ex Japan REIT ETF Lion-Phillip S-REIT ETF CSOP iEdge S-REIT Leaders Index ETF UOB APAC Green REIT ETF
Benchmark index iEdge APAC ex Japan Dividend Leaders REIT Index FTSE EPRA Nareit Asia ex Japan
Net Total Return REIT Index
REIT Yield Focus Index
iEdge S-REIT Leaders Index iEdge-UOB APAC Yield Focus Green REIT Index
Main geographies where underlying REITs are listed Australia and Singapore Singapore and Hong Kong Singapore Singapore Japan, Australia, and SIngapore
Top three REIT constituents Link REIT, GPT Group, and Dexus CapitaLand Integrated Commercial Trust, Ascendas REIT, and Link REIT Ascendas REIT, Mapletree Commercial Trust, and CapitaLand Integrated Commercial Trust
Mapletree Logistics Trust, Ascendas REIT, and CapitaLand Integrated Commercial Trust Scentre Group, Dexus, and Mirvac Group
Number of holdings 31 44 27 28 50
Distribution frequency Semi-annual Quarterly Semi-annual Semi-annual Quarterly
Dividend yield 2.1% 4.2% 4.5% 4.0% 4.3%
Total expense ratio per annum 0.91% 0.60% 0.60% Capped at 0.6% 0.45%
Trading board lot
100 10 100 10 10
Ticker BYJ (SGD) and
CFA (SGD) and
CLR (SGD) SRT (SGD) and SRU (USD)
GRN (SGD) and GRE (USD)
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer doesn’t own shares in any companies mentioned.