Real Estate Research and Products Team - January 2018 - Singapore Exchange
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Real Estate Research and Products Team January 2018 Singapore Exchange
Key Takeaways of the Real Estate Sector
1. Interest rate hike cycle
− Post 3 rate hikes in 2017, Federal Reserve raised rates again in March 2018 and expects 2 more hikes for rest of 2018. A
potential headwind for REITs and physical Real Estate demand?
2. Residential property prices stabilising, and home affordability lowest amongst peers
− Private residential market saw 15 consecutive quarters of price decline (post government measures), the longest since
2004. 3Q17 saw the first uptick at +0.7% q-o-q with another +0.8% q-o-q in 4Q17. Full-year 2017 price +1.1% y-o-y.
− Singapore’s property household affordability at 4.8x* (4.4x incl. HDB), lowest amongst key gateway cities average of >10x.
3. Commercial, Industrial and Hospitality segments still weak
− Commercial and Industrial segments continue to face headwinds but supply peaking in 2017. Demand/supply dynamic to
likely normalize from 2018 onwards.
− In the Hospitality segment, Singapore’s hotel RevPar declined 4.6% y-o-y on elevated supply and larger proportion of
budget tourists, despite +7.7% y-o-y visitor arrivals in 2016.
4. Property developers valuations lower than historical mean
− Singapore property developers currently trading (current PB of 0.76x) below historical mean PB of 0.82x and close to the -1
standard deviation
5. Largest cluster of SREITs in Asia (ex Japan)
− SGX’s SREITs cluster is largest in Asia (ex Japan) with consistently higher dividend yields of 6.0%. SREITs have an average
gearing of 33%, offering stable exposure into foreign assets (more than 70% owning offshore assets).
Source: Demographia
2
Longer-term Singapore Residential Property Cycle
Singapore Private Residential Market (1990-2017)
180.0 63% rally in
Singapore property 11% decline
property prices.
market on upward cycle post cooling
160.0 Peak in 2Q13
and peaked in 2Q96. 10 quarters measures
Cooling measures of decline Period of low 3Q17 marked
140.0 implemented in May '96 interest rates first q-o-q growth
Cooling measures in 16 quarters.
120.0 Full-year 2017
Influx of ABSD in 4Q11. +1.1% y-o-y
Dot-com foreign ↑ABSD in 1Q13.
100.0 bubble buyers TDSR in 2Q13.
Global
80.0
Financial
SARS Crisis 15 quarters
60.0 Asian outbreak
of decline
Financial
Rapid economic Crisis
40.0 4 quarters
growth, increased 15 quarters
demand for housing, of decline of decline
20.0 and allowance to use
CPF for loans in 1993
0.0
Singapore Private Residential Property Price Index (1Q09 = 100)
Source: URA
3
Current state of the Real Estate Sector
Current valuations below historical average Interest rate hike cycle a potential headwind
• SG property developers (current PB of 0.76x) trading below • Expectations of interest rate hike (3 rate hikes in 2017) priced in SREIT
historical average PB of 0.82x and close to -1 standard deviation valuations. Yield spreads between SREITs and 10 year government bond
is at 352bps, 12bps above long term average of 340bps
• S-REITs (current PB of 1.11x), 18.1% above historical average PB of • Rising rates will not substantially impact developers’ land bidding prices.
0.94x and close to +1 standard deviation above the mean However, sharp rise in mortgage rates may impact demand.
• MAS maintained S$NEER policy band at 0%, maintaining a “neutral
1.2 Historical PB of FTSE ST Real Estate Holdings and Development Index policy stance” – suggesting a “dovish” guidance (avg. SREITs gearing at
33%)
1
Yield spread at 352bps vs long term average of 340bps
7
0.8
5
0.6
3
0.4
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 1
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
PB Avg PB PB +1 sd PB -1 sd
FTSE ST Real Estate Investment Trust Index Yield SG 10y Government Bond Yield
Yield spread Long term average yield spread
1.3 Historical PB of FTSE ST Real Estate Investment Trusts Index
4.0% 3M SIBOR vs 3M SOR
1.1
0.9 3.0%
0.7 2.0%
0.5
1.0%
0.3
Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 0.0%
PB Avg PB PB +1 sd PB -1 sd
3M Singapore Interbank Offered Rate (SIBOR) 3M Swap Offer Rate (SOR)
Source: URA, Bloomberg (Dec 2017)
4
SGX’s Real Estate Sector
All SGX Listed Companies
Companies in this sector engage in real estate development, management & operation, and
Real Estate Sector
also include real estate investment trusts (REITs). Drivers for this sector as overseas assets
may be domestic in nature and differ geographically.
15%
SGXs Real Estate sector is made up of 109 companies with combined market cap of over
S$206 billion.
MSCI Asia Pacific ex Japan Index
There are 67 real estate developers, managers and operators listed on SGX valued at over Real Estate Sector
S$115 billion. 75%
8%
Singapore is the largest REIT market in Asia ex Japan with 42 REITs & Property Trusts valued
at over $90 billion listed on SGX and is one of the fastest growing markets in the world.
92%
Note: Market share is defined by number of companies.
1600
SGX Real Estate Developers & Operators have outperformed in the last 1 year
1400
1200
1000
800
600
SGX SREIT Index SGX Real Estate Developers & Operators Index
Source: Bloomberg (Dec 2017)
5
Singapore’s Real Estate – A matured & stable sector
Singapore has one of strongest growth in Singapore is one of largest REIT & property
real estate among the world trusts market in Asia ex Japan
• Singapore ranked 5th most powerful and important • Singapore’s REIT & property trusts sector has a market
property market globally for 2016 cap growth of nearly 30% over the last 8 years
• Singapore recorded the 6th highest residential
capital growth globally at 105% over 10 years
SGX's Real Estate sector has grown
5 times by market cap
200 206.1
3x more companies
150
5x larger by market cap
109
100
50 33 37.8
0
1997 2017
No. of companies Combined mkt cap S$B
Source: Savills’ 12 Cities report (2016), Bloomberg (Dec 2017)
6
Diversity of Property Developers & REITs across different
property assets
Landlords • Developers • REITs
Hospitality Industrial Office/ Retail Residential
Commercial
Developers Developers Developers Developers Developers
Develops and operates Develops and operates Develops and operates Develops and operates Develops and operates
hospitality assets industrial buildings, office buildings retail malls residential properties
including hotels and warehouses, bizhubs
serviced apartments Examples: Guocoland, Examples: CapitaLand, Examples: Bukit
Examples: Sinarmas, Ho Bee Land, UOL UIC, Wheelock Prop Sembawang, Oxley,
Examples: OUE, City LHN, Oxley City Dev
Dev, Far East Orchard
Hospitality REITs Industrial REITS Office REITS Retail REITS
Hold hospitality-related Hold properties used Hold office properties Hold properties meant
properties such as for manufacturing or for retail activities such
hotels and serviced logistics such as Third largest REIT sub- as shopping centres
apartments factories and segment and malls
warehouses
Smallest REIT sub- More volatile and Largest REIT sub-
segment Second largest REIT susceptible to changes segment
sub-segment in business conditions.
In terms of client type, Recent trends include
independent leisure Clients may be single Anchor tenants leases increasing
travelers have higher tenant (longer leases) are important concentration of F&B
room yields than or multi-tenanted outlets and increased
corporates (shorter leases). Sensitive to changes in foot traffic in suburban
Typically shorter leases business conditions malls
Cyclical and sensitive to
global economic Stable yield and longer Resilient yield and very
conditions tenure lease visible assets
7
SGX 109 Real Estate & REITs Companies
67 Real Estate Developers, Managers & Operators
Hong Kong/China Japan Singapore
• Bund Center Investment • Tosei Corporation • 3Cnergy • Guocoland • Oxley Holdings
• China Yuanbang • Amplefield • Heeton Holdings • Pollux Properties
• CWG Int’l •
ASEAN • Apac Realty • Hiap Hoe Roxy-Pacific
• Debao Property
• First Sponsor Group • Asia-Pacific Strat • Ho Bee Land • Sing Holdings
• HongKong Land • Aspen Group • Pacific Star Dev • Bukit Sembawang • Hong Fok Corp • Singapore Edevelopment
• LCT Holdings • Aspial Corp • Regal Int’l • Capitaland • Hwa Hong Corp • Singhaiyi Group
• Lafe Corporation • Astaka Holdings • Sinarmas Land • Centurion Corp • Imperium Crown • Starland Holdings
• Pan Hong Holdings • Capital World • UOA
• City Developments • IPC Corp • Tee Land
• Perennial Real Estate • Emerging Towns & • World Class Global
Cities • Yoma Strategic • Far East Orchard • LHN Ltd • Top Global
• Weiye Holdings
• Yanlord Land • Hatten Land • Fragrance Group • MYP Ltd • Tuan Sing
• Ying Li Int’l • Frasers Centrepoint • Ocean Sky Int'l • United Industrial Corp
Global • Goodland Group • OEL Holsings • UOL Group
• Global Logistic Properties • GSH Corp • Olive Tree Estates • Wheelock Properties
• Wing Tai Holdings
42 Real Estate Investment Trust (REITs) & Property Trusts
REITs (33) Property Trusts (3) Stapled Trusts (6)
Industrial & Office • IREIT Global Retail Specialty Property Trusts Stapled Trusts
• AIMS AMP Capital Ind REIT • Keppel REIT • BHG Retail REIT • First REIT • RHT Health • CDL Hospitality Trusts
• Ascendas REIT • Keppel-KBS US REIT • CapitaLand Mall Trust • Keppel DC REIT Trust • Far East Hospitality
• Cache Logistics Trust • Manulife US REIT • CapitaLand Retail China Trust • Ascendas India Trust
• Parkway Life REIT
• CapitaLand Comm. Trust • Mapletree Log Trust • Fortune REIT Trust • Ascendas Hospitality
Diversified
• Cromwell European REIT • Mapletree Ind Trust • Frasers Centrepoint Trust • Dasin Retail Trust
• Mapletree Comm.
• EC World REIT • OUE Comm. REIT • Lippo Malls Indo Retail REIT Trust • OUE Hospitality Trust
Trust
• ESR-REIT • Sabana REIT • Mapletree GCC Trust
Residential • Viva Industrial Trust
• Frasers L&I Trust • Soilbuild Business Space REIT • Starhill Global REIT
• Ascott Residence • Frasers Hospitality
• Frasers Comm. Trust • Suntec REIT • SPH REIT
Trust Trust
Source: SGX (Dec 2017)
8
A look at some sector leaders on SGX
Mcap: S$15.0B
Largest Singapore-listed
property developer
Mcap: S$11.4B
Owner of one of world’s
largest hotel groups
Mcap: S$1.6B
One of pioneers in residential
property development
Mcap: S$7.9B
Singapore’s first & largest listed
business space & industrial REIT
Mcap: S$1.6B
First data centre REIT listed in Asia
Source: Company websites, Bloomberg (Dec 2017)
9
SGX’s 42 SREITs & Property Trusts largest in Asia (ex Japan)
Singapore is an Established Asian Offers investors stable
REIT Market exposure into foreign assets
More than 70% SREITs & Property Trusts
own offshore assets across Asia Pac,
Singapore has 42 REITs & Property Trusts with a Singapore Hong Kong Australia Japan South Asia, America & Europe
total market capitalisation of over S$92 billion Market Cap S$92B S$44B S$146B S$146B
and average dividend yield of 6.0%, providing
liquidity to largest REIT Market in Asia (ex Japan) Avg Div Yield 6.0% 6.0% 5.9% 4.3% Singapore
Overseas 12
Avg P/B* 1.06 0.83 1.34 1.34 16
The sector has experienced high growth with a
No. of REITs 42 11 45 63
market capitalisation CAGR of 25% (or 7x) over
the last 10 years. Singapore
&
Overseas
14
SREITs consistently pay one of highest dividend yields in the world
Tax incentive for investors
8 Individual investors
SREITs distribute higher dividend yields compared to major global REIT indices
- Tax exemption on dividends for both
6 5.2 local and foreign investors
5.0
4 4.0 Institutional investors
3.8 - Withholding tax for foreign institutional
2 unit holders at 10% (reduced from 20%)
Average gearing at 33%
0
% Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17
S-REITs average gearing at 33%, below the
S REIT Index AU REIT Index J REIT Index US REIT Index limit of 45%. This may keep financial expense
liabilities in check.
Note: * using weighted market capitalisation average Source: Bloomberg (Jan 2018)
10Key Macro-Economic Drivers for the sector
1. Demand 2. Supply
Population growth Land supply
− Increase in population size increases demand for − Government Land Sales (GLS) affect land supply for
housing property developers to bid for
− Singapore’s population is expected to hit 6.9m by 2030 − GLS has been declining since 2H2012, resulting in land
from the current 5.6m banks of Singapore developers depleting over the years
Increased education, employment and rising Unsold inventory held by developers
affluence − Unsold units have declined since 2011 with about 27% of
− Better educated population, more dual-income unsold units belonging to the high-end segment
married couples result in higher rates of home- Vacancy rates and transactions
ownership as affordability increases
− Home vacancy rates affect transaction prices as; vacancy
− 90.9% of Singaporean families own homes in 2016 vs rates are at one of highest in 16 years
58.8% in 1980; some may also own more than 1
property
Government Cooling Measures
− Cooling measures such as stamp duties, and loan
3. Interest Rates
restrictions help stabilise increasing demand over the
years (SG households are holding an est. S$4B in cash Impact on mortgages
since introduction of property curbs) − Higher interest rates result in higher borrowing costs for
− Major measures in 2011 (SSD and ABSD) and 2013 home owners
(ABSD changes and TDSR) have largely curbed demand
Source: SingStat, URA
11Residential Sub-segment
Core Central Region Rest of Central Region Outside Central Region
Stabilization in prices (CCR) (RCR) (OCR)
and transactions Landed Non-Landed
Segment Drivers
− Demographics
4,000 Private Residential new launches & primary sales (ex. EC)
− Affordability/Affluence, Employment rate
− Government measures/policies 3,000
− Inventory/new launches, vacancy rate
2,000
− Interest rates
Segment Snapshot 1,000
− Household affordability lower than peers. Singapore household
affordability (private property) at only 4.8x (or 4.4x incl. HDB), lowest -
May-11
May-12
May-13
May-14
May-15
May-16
May-17
Jan-11
Sep-11
Jan-12
Sep-12
Jan-13
Sep-13
Jan-14
Sep-14
Jan-15
Sep-15
Jan-16
Sep-16
Jan-17
Sep-17
Jan-18
amongst key gateway cities such as Hong Kong (18x), London, San
Francisco, Tokyo and Sydney (at least 10x) - Demographia
− Growing local workforce and peaking supply. Government aims to grow
local workforce by c.25-40k (or 1%) annually for next few years (vs. 2022
CCR RCR OCR
Source: URA (4Q17) , JLL, Demographia, Singstat
12Industrial Sub-segment Warehouses/
Business Parks Hi Tech Hubs
Factories
Still on a decline but look out for
green shoots 1800 Industrial space supply to taper off after 2017
1600
Segment Drivers 1400 Warehouse space '000 sq m gross
− Industrial parks rental rates 1200 Factory space '000 sq m gross
1000
− Increased manufacturing output, higher GDP growth rates 800
− Government shift towards various business, higher demand for 600
related biz parks 400
− Supply of land available for industrial parks development 200
0
2018 2019 2020 2021
Segment Snapshot
− Industrial parks supply consolidating in 2017. Supply for Vacancy rates reached a high of 11.1% in 2017. Rental rates continue
industrial sector to peak in 2017 and reduce in the next few on a downward trend
years.
Vacancy rates at high 110.0
− Rental decline and low take-up rates. Rental rates expected to 49,000 of 11.1% in 2017
stabilize in tandem with occupancy rates as new industrial space
supply starts to taper off after 2017. Rental rates in 2017 fell 47,000
105.0
2.8% y-o-y (vs. decline of 6.8% in 2016). Vacancy rates reached a
high of 11.1% in 2017. 45,000 100.0
− Focus on higher value-add businesses. Government plans for 43,000
Singapore’s economic shift will increase demand for more hi- 95.0
tech factories and business parks. 41,000
− Green shoots from manufacturing sector. Economic Vacant (‘000 sq m) 90.0
Development Board expects Singapore’s manufacturing output 39,000
Occupied (‘000 sq m)
forecast for 2Q17 to increase 16%, which could potentially 37,000
85.0
Rental Index (RHS)
increase demand for business parks.
35,000 80.0
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Source: URA, Singstat, JTC (4Q17)
13Office/Commercial Sub-segment 3 classes of office buildings – Grade A B, and C
Central Business
“Headwinds” continue to persist as District (CBD)
City-fringe Sub-urban areas
office rents likely to bottom
Singapore office supply to taper off in next 2 years
Segment Drivers 200
206
151
− State of the economy (closely linked to financial industry) 104 93
− Office rental rates 41
2
− Demand for office space and size, vacancy rates 0
2018 2019 2020 2021 2022 >2022
− Supply of land available for office developments Office Space '000 sq m gross
195 Central region office space property prices and rentals bottomed 145
Segment Snapshot 190
140
185
− Office supply expected to peak in 2017. New office supply will peak
180 135
in 2017 largely due to Marina One, Guoco, DUO, and shortage of 175
supply to be expected in the next 2 years. 170
130
− Rental rates have bottomed in 2017. Office rents in CBD have been 165 125
on a steady decline since 2015 (9 quarters of decline). Grade A 160
120
155
office rents have bottomed in 1Q-2Q17 and have started to see an
150 115
increase of 2-3% q-o-q for quarters 3Q and 4Q17. 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q
− Decentralisation and smaller physical footprint. Many middle and 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017
Rental Index Price Index (RHS)
back offices have decentralised to sub-urban areas with lower
rental rates. Reduction of physical footprint by adopting smaller Average office space vacancy rates for 2017 at 12.5% high
desks and open concepts (e.g. MUFG). 13
11
− Sale of Grade A building still strong. Office investments made up
63% of total investment sales of $4.1 billion in 1Q2017, higher than 9
previous 2 quarters. (Sale of Asia Sq Tower 1 to Qatar Investment 7
Authority, BlackRock and CapitaLand exploring sale of Tower 2) 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q
2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017
Source: URA (4Q17) , Singstat, JTC
14Retail / Hospitality Sub-segment
Hotel RevPar -1.6%, tourist arrivals +6.2% y-o-y
A Challenging year for retail and
hospitality 20%
15%
Segment Drivers
10%
− Shopper traffic 5%
− Retail rental
0%
− Tourist arrivals -5%
− Government land sales
− Supply of retail space -10% -15%
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
May-11
May-12
May-13
May-14
May-15
May-16
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Segment Snapshot Tourist arrival y-o-y Hotel RevPar y-o-y
− Structural challenges in Retail sector as E-Commerce disrupts.
Retail space supply expected to peak in 2018 ('000 sq m gross)
Vacancy rate for Singapore Retail at 7.4% in 4Q17 (vs. 8.2% in 3Q17).
Rental rates continue to decline with -4.7% y-o-y in (vs. -8.3% in 300 280
2016). New Retail space expected to peak in 2018 at 280,000 gross
250
sqm.
200
− Decentralization into suburban Retail malls. Government’s plan of
decentralized business districts has seen growing development in 150
suburban area. Most of upcoming Retail supply coming from Outside 96
Central Region in 2018. 100
58
42
− Elevated hotel supply and mix-shift in tourist profile. Singapore’s 50 20
13
hotel RevPar declined 1.6% y-o-y in 2017 (vs. decline of 4.6% 2016)
0
on back of +6.2% y-o-y in visitor arrivals, likely due to higher supply 2018 2019 2020 2021 2022 >2022
and higher mix of budget tourists (hotel occupancy rates average at
86%). Supply expected to taper off after 2017.
Source: URA (4Q17), Singstat, STB (2017)
15Valuations of the Real Estate Sector
Trailing PB (x) ROE (%)
1.2x 1.07 1.07 12.0x
0.92 9.6
1.0x 10.0x
0.72 7.2 7.5
0.8x 8.0x
0.6x 6.0x
0.4x 4.0x 3.1
0.2x 2.0x
0.0x 0.0x
Property Property SREIT Median SREIT Average* Property Property SREIT Median SREIT Average*
Developer Developer Developer Developer
Median Average* Median Average*
Gearing Ratio (%) Dividend Yield (%)
34.5 34.1 7.0 6.0 6.0
34.0 33.6 6.0
33.5 33.1 5.0
33.0 4.0
32.5 32.2 3.0 2.0 2.1
32.0 2.0
31.5 1.0
31.0 0.0
Property Property SREIT Median SREIT Average* Property Property SREIT Median SREIT Average
Developer Developer Developer Developer
Median Average* Median Average
Note: * using weighted market capitalisation average Source: Bloomberg (Dec 2017)
Gearing Ratio refers to Net Debt to Equity for property developers and Debt/Asset ratio for SREITs
16Commonly used valuation methodologies for the sector
RNAV/NAV Calculation Dividend Discount Model
Revalued Net Asset Value (RNAV) and Net This valuation method (DDM) can value a
Asset Value (NAV) mostly used as a stock based on the absolute amount of
valuation method for Developers dividends it distributes to shareholders in
RNAV/NAV can be derived by employing a perpetuity
discounted cash flow (DCF) model on To incorporate dividends growth, the
properties under development. Investment Gordon Growth Model can be used.
properties’ NAV can be calculated using an As Singapore REITs are required to pay out
income capitalisation method the majority of earnings to unit holders, the
Premium or discount to RNAV/NAV are DDM is an appropriate valuation method
driven by factors such as property prices, Many investment analysts use a
transaction volumes and execution combination of RNAV/NAV and DDM
valuations to value REITs
Price-to-book (P/B) Discounted Cash Flows
P/B derived by dividing stock price by book
(DCF)
value per share Present value of an investment (adjusted
Shows an investor how much a stock is for time value of money). Sum of value of
worth relative to book value each period’s free cash flow to the firm,
Most S-REITs trade at or slightly above their discounted back to present
respective book values while Singapore Analysts typically use 10-year DCF models
developers trade at a discount to their with a terminal growth rate assumption as
respective book values a sanity check on valuation (P/E and P/B)
17New REITS ETFs on SGX
Phillip SGX APAC NikkoAM- Lion-Phillip S-REIT ETF
Dividend Leaders StraitsTrading Asia
Phillip SGX APAC Dividend Leaders REIT ETF REIT ETF Ex Japan REIT ETF
This ETF seeks to provide investors a high level of income and
moderate long-term capital appreciation by tracking the Listing date 20th October 2016 29th March 2017 30th October 2017
performance of 30 publicly traded REITs in the Asia Pacific ex-
Japan region. The Asia Pacific REITs ETF allows investors a Stock code BYI (USD) and CFA (SGD) and CLR
BYJ (SGD) COI (USD)
convenient and easy way to gain broad exposure to the REITs
Management Fee 0.30% p.a. 0.50% p.a. 0.50% p.a.
and their prime real estate assets in the region.
Geographical Australia 58.4%, 61% Singapore, 100% Singapore-listed
breakdown of Singapore 27.5% 23% Hong Kong,
NikkoAM-StraitsTrading Asia ex Japan REIT ETF underlying REITS Hong Kong 13.5% 8% China, 6%
This ETF is the world’s first Asia ex Japan REIT ETF. It tracks the Malaysia, 3%
Indonesia (Source:
FTSE EPRA/NAREIT Asia ex Japan REITs Net Total Return SGD FTSE, 31 Jan 2017)
Index, part of leading FTSE EPRA/NAREIT Global Real Estate
Index series. The Asia ex Japan REITs offers some of the most AUM US$18mil S$100mil S$124mil
(as of 31 Dec 2017)
attractive yields across the world.
Index indicative 5.01% before tax 5.72% before tax 5.75% before tax
dividend yield (per
Lion-Phillip S-REIT ETF annum)
First REIT ETF in the world to comprise 100% Singapore REITs Distribution period Semi-Annual, Quarterly Semi-Annual,
and is designed to provide investors with low-cost access to April and October February and August
high-quality S-REITs that offer sustainable income streams. The
Lion-Phillip S-REIT ETF tracks the Morningstar® Singapore REIT Average bid-ask 60 bps 21 bps 25 bps
spread
Yield Focus Index, which comprises 23 Singapore REITs.
Bloomberg code PAREIT SP (USD) AXJREIT SP (SGD) SREITS SP
PAREITS SP (SGD) AXJREUS SP (USD)
Source: Bloomberg & ETF Manager’s websites (data as of 31 December 2017).
18Summary
> S$206B 42
109 Real Estate & SGX’s 42 REITs and
SREITs with property trusts the
combined market largest in Asia ex
cap of over S$206B Japan
6.0%
SREITs consistently
offer one of highest
dividend yields in
the world
0.76x >5% yield
SG property 3 REIT ETFs offer
developers trading investors diversified
below historical exposure with over
average PB 5% div yield
19Appendix
20SGX Real Estate Indices
1500 SGX Real Estate Indices is made up of 5 indices to measure
SGX Real Estate Indices
performance of real estate developers, operators, and REITs listed
on SGX, they are the SGX Real Estate Index, SGX Real Estate 20
1400 Index, SGX Real Estate Developers & Operators Index, SGX S-REIT
Index, SGX S-REIT 20 Index
1300 − SGX Real Estate Developers & Operators Index
− Measures the performance of listed real estate developers
and operators in Singapore
1200
− 23 member companies with a combined market capitalisation
of about S$75 billion
1100 − 1y total return of 29.1%, 3y total returns of 29.3%, 5y total
returns of 18.1%
− SGX S-REIT Index
1000
− Measures the performance of REITs in Singapore
− 35 member companies with a combined market capitalisation
900 of about S$83 billion
− 1y total return of 28.2%, 3y total returns of 24.6%, 5y total
800 returns of 25.6%
Index inclusion criteria
− A company’s business sector must be classified as “Real Estate” or
700 “Real Estate Operations” or “Residential & Commercial REIT”, as
defined by the Thomson Reuters Business Classification (Section
13) in the respective indices
600
Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 − Index liquidity and free float criteria must be met
SGX SREIT Index SGX Real Estate Developers & Operators Index
Source: Bloomberg (Dec 2017), refer to appendix for full list of index constituents
21Constituents of the SGX Real Estate Developers & Operators Index
Stock Index Market Cap Price SDAV Net D/E Dividend
Name GICS Industry PB (x) ROE (%)
Code Weight (%) (S$Mil) (S$) (S$'000) (%) Yield (%)
UOL Group Ltd * U14 Real Estate Management & Devel 12.0 7,466 9 9,632 0.8 10.1 21.4 2.1
City Developments Ltd * C09 Real Estate Management & Devel 11.8 11,357 12 19,927 1.2 5.9 10.4 0.6
Hongkong Land Holdings Ltd * H78 Real Estate Management & Devel 10.4 22,139 9 18,679 0.5 16.4 6.9 2.9
CapitaLand Ltd * C31 Real Estate Management & Devel 10.4 14,992 4 37,586 0.8 8.6 48.7 3.4
Bukit Sembawang Estates Ltd B61 Real Estate Management & Devel 9.9 1,623 6 1,358 1.3 2.9 -28.6 0.7
Yanlord Land Group Ltd Z25 Real Estate Management & Devel 8.2 3,129 2 5,089 0.7 14.7 46.9 4.2
Wing Tai Holdings Ltd W05 Real Estate Management & Devel 7.0 1,766 2 2,318 0.5 1.2 2.4 1.5
GuocoLand Ltd F17 Real Estate Management & Devel 4.9 2,651 2 1,299 0.7 13.9 84.2 3.4
Wheelock Properties Singapore Ltd M35 Real Estate Management & Devel 4.4 2,273 2 1,472 0.7 3.8 -24.5 3.4
Yoma Strategic Holdings Ltd Z59 Real Estate Management & Devel 3.6 1,023 1 2,500 1.4 6.7 25.0 0.6
Ho Bee Land Ltd H13 Real Estate Management & Devel 3.4 1,638 2 404 0.5 8.2 40.0 3.2
GSH Corp Ltd BDX Real Estate Management & Devel 2.3 979 1 731 2.5 22.9 31.4 -
Hong Fok Corp Ltd H30 Real Estate Management & Devel 2.2 749 1 338 0.4 10.9 33.3 1.3
Far East Orchard Ltd O10 Real Estate Management & Devel 1.9 638 2 207 0.5 1.7 0.2 -
Rowsley Ltd A50 Professional Services 1.7 611 0 8,449 1.5 -14.7 27.1 -
Tuan Sing Holdings Ltd T24 Real Estate Management & Devel 1.6 534 0 647 0.6 6.6 124.6 1.5
Ying Li International Real Estate Ltd 5DM Real Estate Management & Devel 1.3 386 0 735 0.5 8.3 62.1 -
Centurion Corp Ltd OU8 Real Estate Management & Devel 0.9 441 1 271 1.0 7.4 119.3 4.2
Sing Holdings Ltd 5IC Real Estate Management & Devel 0.9 178 0 284 0.7 1.3 73.7 2.4
Aspen Group Holdings Ltd 1F3 Real Estate Management & Devel 0.7 173 0 123 - 52.2 -7.5 -
HLH Group Ltd H27 Food Products 0.2 43 0 92 0.4 5.7 4.0 -
LHN Ltd 41O Real Estate Management & Devel 0.2 95 0 113 1.2 -4.6 9.7 1.1
Boldtek Holdings Ltd 5VI Construction & Engineering 0.1 34 0 71 1.4 -4.6 129.2 -
Source: Bloomberg (Dec 2017) * Indicates Straits Times Index (STI) stocks
22Constituents of the SGX S-REIT Index
Stock Index Weight Market Cap SDAV Dividend
Name GICS Industry Price (S$) PB (x) ROE (%) D/A (%)
Code (%) (S$Mil) (S$'000) Yield (%)
Ascendas REIT * A17U Equity Real Estate Investment 9.7 7,854 3 23,107 1.3 7.2 33.4 6.3
CapitaLand Mall Trust * C38U Equity Real Estate Investment 9.3 7,554 2 20,680 1.1 9.7 30.3 5.7
CapitaLand Commercial Trust * C61U Equity Real Estate Investment 9.1 6,964 2 16,257 1.0 9.9 29.1 4.5
Suntec Real Estate Investment Trust T82U Equity Real Estate Investment 8.8 5,703 2 10,544 1.0 4.0 35.0 5.6
Mapletree Commercial Trust N2IU Equity Real Estate Investment 5.6 4,664 2 8,126 1.2 9.7 36.4 5.3
Mapletree Industrial Trust ME8U Equity Real Estate Investment 4.6 3,826 2 5,096 1.4 11.0 29.1 3.7
Keppel REIT K71U Equity Real Estate Investment 4.3 4,247 1 5,822 0.9 3.6 33.2 4.7
Mapletree Greater China Comm Trust RW0U Equity Real Estate Investment 4.1 3,468 1 5,063 1.0 11.1 39.2 6.5
Mapletree Logistics Trust M44U Equity Real Estate Investment 3.9 4,035 1 5,923 1.3 8.0 38.4 6.9
Ascott Residence Trust A68U Equity Real Estate Investment 3.1 2,623 1 3,309 1.0 6.2 35.4 7.8
CDL Hospitality Trusts J85 Equity Real Estate Investment 2.4 2,026 2 2,417 1.1 7.6 32.5 6.1
Frasers Logistics & Industrial Trust BUOU Equity Real Estate Investment 2.4 1,763 1 4,039 1.3 7.8 29.0 6.6
Frasers Centrepoint Trust J69U Equity Real Estate Investment 2.4 2,073 2 1,974 1.1 10.7 29.0 5.5
Manulife US REIT BTOU Equity Real Estate Investment 2.2 1,250 1 1,839 1.1 8.3 33.5 2.8
Parkway Life REIT C2PU Equity Real Estate Investment 2.1 1,809 3 1,871 1.7 9.6 36.3 4.9
CapitaLand Retail China Trust AU8U Equity Real Estate Investment 2.1 1,565 2 1,807 1.0 9.7 28.0 6.1
Starhill Global REIT P40U Equity Real Estate Investment 2.0 1,690 1 2,102 0.8 5.3 35.2 6.5
Keppel DC REIT AJBU Equity Real Estate Investment 2.0 1,612 1 2,791 1.5 6.0 32.9 4.8
Frasers Commercial Trust ND8U Equity Real Estate Investment 1.6 1,205 1 1,565 0.9 8.4 34.6 6.8
OUE Hospitality Trust SK7 Equity Real Estate Investment 1.6 1,536 1 1,128 1.1 5.5 38.3 6.5
Ascendas India Trust CY6U Real Estate Management & Devel 1.5 1,075 1 815 1.5 19.5 28.1 4.8
Lippo Malls Indonesia Retail Trust D5IU Equity Real Estate Investment 1.5 1,130 0 1,586 1.1 6.3 33.4 8.4
Cache Logistics Trust K2LU Equity Real Estate Investment 1.4 912 1 2,084 1.1 3.3 36.2 7.7
First Real Estate Investment Trust AW9U Equity Real Estate Investment 1.4 1,084 1 970 1.4 8.9 33.5 6.4
Far East Hospitality Trust Q5T Equity Real Estate Investment 1.4 1,335 1 1,125 0.8 0.9 32.7 5.6
Frasers Hospitality Trust ACV Equity Real Estate Investment 1.3 1,461 1 653 1.0 11.3 32.0 6.8
AIMS AMP Capital Industrial REIT O5RU Equity Real Estate Investment 1.3 928 1 616 1.0 0.1 36.0 2.1
SPH REIT SK6U Equity Real Estate Investment 1.3 2,694 1 1,356 1.1 6.6 25.3 5.4
Ascendas Hospitality Trust Q1P Equity Real Estate Investment 1.1 971 1 645 1.0 0.8 32.2 6.9
ESR-REIT J91U Equity Real Estate Investment 1.1 742 1 731 0.9 0.1 39.5 6.9
RHT Health Trust RF1U Health Care Providers & Servic 0.9 679 1 1,094 1.0 3.1 26.0 1.6
Soilbuild Business Space REIT SV3U Equity Real Estate Investment 0.9 704 1 981 0.9 -4.0 40.1 8.3
Sabana Shari'ah Compliant Industrial REIT M1GU Equity Real Estate Investment 0.7 416 0 981 0.7 -4.8 37.9 8.0
Viva Industrial Trust T8B Equity Real Estate Investment 0.6 907 1 889 1.2 5.2 39.5 8.5
IREIT Global UD1U Equity Real Estate Investment 0.3 486 1 305 1.2 11.2 40.2 7.5
Source: Bloomberg (Dec 2017) * Indicates Straits Times Index (STI) stocks
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