Singapore's five best performing REITs in 2013 YTD

The five best performing REITs since the end of 2012 have included two REITs that invest mostly in properties in Singapore, one that invests in properties in Hong Kong, one that invests in properties in Japan and one that invests mostly in properties in Indonesia, according to an My Gateway email update by the Singapore Exchange.

Total returns (including dividends) of the REITs in 2013 YTD have ranged from -11.1% for CapitaRetail China Trust to + 13.3% for Parkway Life REIT.

Real Estate Investment Trusts (REITs) invest in professionally managed real estate assets. With three new listings this year, SGX now lists 25 REITs that are governed by the Collective Investment Scheme. The 25 REITs listed on SGX are varied by the type of properties in the portfolio in addition to the location of those properties. Five invest solely in international properties while nine hold both international and Singapore real estate. There are 11 REITs that have their entire portfolio currently made of Singapore properties.

In the 2013 year thus far, the FTSE ST REIT Index has declined 1.5% on a total return basis which takes into account weighted price appreciation and dividend distributions. This has followed on from a total return of 46.2% for the 2012 year.

Attuned with the status of an Asian REITs hub, just two of the five best performing REITs since 2012 are investing mostly in Singapore properties. The five best performing REITs since 2012 include Fortune REIT which invests in residential-related properties in Hong Kong, Saizen REIT which invests in residential-related properties in Japan and First REIT that invests mostly in health care related properties in Indonesia.

First Real Estate Investment Trust rated 'buy' by OCBC

OCBC Investment Research in a Jan 30 research report says: "First REIT (FREIT) reported its 4Q11 results which were within our expectations. Gross revenue surged 82.0% y-o-y to $13.9 million while distributable amount to unitholders jumped 122.9% to $12.1 million. This was partly due to a special distribution of $2.2 million arising from FREIT's recent divestment of the Adam Road property.

"DPU for FY2011 was 7.01 cents, versus 6.63 cents in FY2010 due to additional distributions from the asset divestment as highlighted earlier and a 5-for-4 rights issue in December 2010. This translates into an attractive yield of 9.1%.

"A revised RNAV-derived fair value estimate of 89 cents (previously 84 cents) as we roll forward our valuations and lower our terminal capitalisation rate inputs for some of its properties. MAINTAIN BUY."

First Real Estate Investment Trust rated 'increase exposure' by SIAS

SIAS Research in an Oct 24 research report says: "Despite increased operating expenses coming from the three new acquisitions, YTD net property income (NPI) and profit margins (excluding divestment of investment property) improved slightly increasing from 98.7% to 99.2% and 79.5% to 81.9% respectively.

"We expect further growth to their results coming from gradually increase in utilisation of their new acquisitions, MRCCC and Sarang Hospital. FREIT had announced a substantial increase in distributions for the 3rd quarter at 1.92 cents per share compared to its last quarter distribution of 1.58 cents per share. This increases its dividends yield to 8.6%. Intrinsic value of 97 cents. MAINTAIN INCREASE EXPOSURE."

OCBC ups First REIT target to $0.835, keeps buy

OCBC Investment Research has raised its target price for First Real Estate Investment Trust (FRET.SI) to $0.835 from $0.80 and kept its buy rating.

OCBC has raised its estimates for First REIT after it bought its first hospital in South Korea for about $13 million ($16 million). The brokerage said it expects the net property income yield of the hospital to be about 9%, higher than its estimated distribution yield of 7.7% for 2011.

“We also like the fact that First REIT's first venture into Korea would provide a means of diversifying its revenue stream as current assets comprise three nursing homes in Singapore and six properties in Indonesia,” said OCBC in a report.

 

The brokerage said it expects First REIT to capitalise on the favourable interest rate environment and seek more yield-accretive assets in the near term.

 

At 9:02 a.m., shares of First REIT were 0.6% higher at $0.81, and have gained about 15% since the start of the year.

 

 

First REIT makes it to MSCI Singapore index

First Real Estate Investment Trust says it has been included in the MSCI Singapore Index with effect from 1 June 2011.

MSCI is a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services.

The MSCI indices are among the most widely tracked global equity benchmarks covering companies with good operational results and growth prospects. By being a constituent stock on the MSCI Singapore Index, First REIT can be better tracked by a wider group of institutional investors and funds on a global platform.

MSCI’s indices are market capitalisation-weighted and serve as the basis for over 400 exchanged-traded funds throughout the world. MSCI conducts its index reviews four times each year, with the latest changes being implemented at the close of market on 31 May 2011.

First Real Estate Inv Trust rated 'buy' by OCBC

OCBC Investment Research in an Apr 21 research report says: "First Reit (FREIT) reported its 1QFY11 results with gross revenue increasing 95.6% y-o-y and 90.5% q-o-q to $14.6 million, forming 27.4% of our full year forecast.

"The better-than-expected gross revenue growth was largely due to recognition of deferred rental income from the Adam Road Hospital as a result of its divestment (completed o n March 25, 2011). Total distributable income was within expectations, having increased 88.5% y-o-y and 82.1% q-o-q to $9.9 million, meeting 25.1% of our FY2011 estimates.

"This translated into a DPU of 1.58 cents, representing a 54.7% y-o-y decline but a 81.6% q-o-q increase. RNAV-derived fair value estimate remains unchanged at 80 cents, with potential total returns of 16.5%. MAINTAIN BUY."