REIT ETF Singapore Guide (2023): Here's What Investors Need to Know!

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.

As of August 2023, there are 42 REITs and property trusts listed in Singapore, making our country one of Asia’s largest markets for them:

Seven of these REITs are included in Singapore’s benchmark Straits Times Index (STI), which has 30 major components:

There 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) which is more accesible. 

Here’s all you need to know about the latter!

TL;DR: Singapore REITs ETFs Guide (2023) — Best ETF Singapore (REITs)

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. Information is accurate as of 26 August 2023.

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• What Are REIT ETFs?
• Why REIT ETFs?
• 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
• REIT ETF Comparison

REIT ETF Investement Singapore Guide: 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, five REIT ETFs are tracking different indices.

S-REIT ETF List

The REIT ETFs listed in our city-state are:

1. Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ) (SGX: BYI)
2. NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA) (SGX: COI)
3. Lion-Phillip S-REIT ETF (SGX: CLR)
4. CSOP iEdge S-REIT Leaders Index ETF (SGX: SRT) (SGX: SRU)
5. UOB APAC Green REIT ETF (SGX: GRN) (SGX: GRE)

More on the REIT ETFs later, but first…

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Why REITs ETFs Tracking REIT Index Funds in Singapore?

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.

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Phillip SGX APAC Dividend Leaders REIT ETF: Singapore Dividend ETF via REITs

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 the aim of enhancing returns above that of traditional market-cap-weighted ETFs.

Phillip SGX APAC Dividend Leaders REIT ETF tracks the iEdge APAC ex-Japan Dividend Leaders REIT Index.

Regarding 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 (31.93%) take up most of the ETF, followed by Retail REITs (35.75%) and Industrial REITs (13.41%):

The following table shows the top 10 constituents of Phillip SGX APAC Dividend Leaders REIT ETF (data as of 30 June 2023):

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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 36.3% of the ETF, followed by industrial REITs (31.7%) and office REITs (12.5%): 

The following table shows the top 10 constituents of NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (data as of 30 June 2023):

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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 (38.80%), followed by Retail REITs (20.30%) and Office REITs at 12.20%. 

The following pie chart shows the breakdown of the different REIT sectors in Lion-Phillip S-REIT ETF:

Lion-Phillip S-REIT ETF contains 28 high-quality Singapore REITs, and the weight of each REIT is capped at 10%.

As of end-June 2023, the top 10 constituents of the Lion-Phillip S-REIT ETF were:

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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.

Like the Lion-Phillip S-REIT ETF, the CSOP iEdge S-REIT Leaders Index ETF only focuses on Singapore-listed REITs. 

Currently, take up most of CSOP iEdge S-REIT Leaders Index ETF’s allocation as follows: 

Here are the top 10 REITs that are part of the CSOP iEdge S-REIT Leaders Index ETF (as of 24 August 2023): 

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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 Retail REITs take up the lion’s share (38.51%), followed by Diversified REITs (30.18%) and Office REITs (13.58%): 

Regarding 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 31 March 2023:

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REIT ETF Comparison

Here’s a quick comparison of the five REIT ETFs that we just discussed:

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Have Burning Questions Surrounding REITs?

Then, you must check out the Investing group on Seedly and participate in the lively discussion regarding REITs and stocks:

Read More

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