SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Yoma Strategic Holdings / Equity Bottom-Up

Key Singapore Market Moves and Flows in 3Q21

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The 10 best performing S-Reits and property trusts with over a 10-year listing history have averaged 12.5 per cent in 10-year annualised total returns. On an absolute basis across the 10-year period, these 10 trusts have generated total returns averaging 240 per cent as Reits continue to be an asset class of choice for the longer horizon.

Comparatively, the 10 have also outperformed major Asia-Pacific Reit markets which have yielded 10.3 per cent in average total returns for the same period. 
Of the 10, the top five trusts Mapletree Industrial Trust, Mapletree Logistics Trust, Mapletree Commercial Trust, ParkwayLife REIT and AIMS APAC REIT, were also among Asia Pacific’s 20 best performing REITs with a longer trading history. 
Three of these are S-Reits sponsored by Mapletree Investments, which owns and manages over S$66 billion of data centre, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail properties. 
Mapletree Industrial Trust (MINT) listed in October 2010 with an initial investment portfolio of 70 Singapore industrial properties valued at S$2.1 billion including business parks, flatted factories, stack-up/ramp-up buildings and light industrial buildings. 
Today, the trust has tripled in portfolio with assets under management of S$6.7 billion across 114 properties in Singapore and North America. In terms of asset mix, MINT has also diversified with acquisitions into high-tech buildings and data centres making up 20.9 per cent and 39.8 per cent respectively. Its latest acquisition of 29 data centres in the United States makes it one of the largest owners of data centres among Asia-Pacific Reits.

Mapletree Logistics Trust (MLT) was one of the first Mapletree Group S-Reits to be listed in July 2005 and was the first Asia-focused logistics Reit. Its portfolio of properties has swelled from 15 properties worth S$422 million to 163 properties worth S$10.7 billion across nine countries in the Asia-Pacific.

MLT now has a diversified tenant base of 752 customers with close to 75 per cent of its portfolio serving consumer-related sectors.

Mapletree Commercial Trust (MCT) listed in April 2011 with three properties located in Singapore valued at S$2.8 billion. Its enlarged portfolio value has since trebled and comprises five Singapore properties worth S$8.7 billion.

ParkwayLife Reit (PLife) listed in August 2007 with just three properties in Singapore - Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital with a combined value of S$775 million. Fourteen years on, it has almost trebled its portfolio value at S$1.99 billion across 53 properties in Singapore, Japan and Malaysia and considers itself to be one of the largest listed healthcare Reits in Asia.

PLife recently completed its third strategic recycling initiative with a divestment of a non-core asset and acquired two nursing homes in Japan, increasing its geographical coverage and further diversification of age-care tenants.

Some may remember Aims Apac Reit as MacarthurCook Industrial Reit which listed in April 2007 with a portfolio of 12 industrial properties in Singapore valued at S$316 million.

The Reit has since rebranded itself in 2019 and has grown over five times in size with a portfolio value of S$1.7 billion across 28 properties in Singapore and Australia.

Its tenant base of 188 tenants has also diversified across the years, and include resilient sectors such as logistics and warehouses, bio-medical and life science, telecommunications and data centre operators accounting for seven out of its top 10 tenants. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/10-s-reits-yielding-long-term-annualised-returns">read </a>the original version.
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    10 best performing trusts


The 10 best performing S-Reits and property trusts with over a 10-year listing history have averaged 12.5 per cent in 10-year annualised total returns. On an absolute basis across the 10-year period, these 10 trusts have generated total returns averaging 240 per cent as Reits continue to be an asset class of choice for the longer horizon.

Comparatively, the 10 have also outperformed major Asia-Pacific Reit markets which have yielded 10.3 per cent in average total returns for the same period.  
Of the 10, the top five trusts Mapletree Industrial Trust, Mapletree Logistics Trust, Mapletree Commercial Trust, ParkwayLife REIT and AIMS APAC REIT, were also among Asia Pacific’s 20 best performing REITs with a longer trading history.  
Three of these are S-Reits sponsored by Mapletree Investments, which owns and manages over S$66 billion of data centre, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail properties.  
Mapletree Industrial Trust (MINT) listed in October 2010 with an initial investment portfolio of 70 Singapore industrial properties valued at S$2.1 billion including business parks, flatted factories, stack-up/ramp-up buildings and light industrial buildings.  
Today, the trust has tripled in portfolio with assets under management of S$6.7 billion across 114 properties in Singapore and North America. In terms of asset mix, MINT has also diversified with acquisitions into high-tech buildings and data centres making up 20.9 per cent and 39.8 per cent respectively. Its latest acquisition of 29 data centres in the United States makes it one of the largest owners of data centres among Asia-Pacific Reits.

Mapletree Logistics Trust (MLT) was one of the first Mapletree Group S-Reits to be listed in July 2005 and was the first Asia-focused logistics Reit. Its portfolio of properties has swelled from 15 properties worth S$422 million to 163 properties worth S$10.7 billion across nine countries in the Asia-Pacific.

MLT now has a diversified tenant base of 752 customers with close to 75 per cent of its portfolio serving consumer-related sectors.

Mapletree Commercial Trust (MCT) listed in April 2011 with three properties located in Singapore valued at S$2.8 billion. Its enlarged portfolio value has since trebled and comprises five Singapore properties worth S$8.7 billion.

ParkwayLife Reit (PLife) listed in August 2007 with just three properties in Singapore - Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital with a combined value of S$775 million. Fourteen years on, it has almost trebled its portfolio value at S$1.99 billion across 53 properties in Singapore, Japan and Malaysia and considers itself to be one of the largest listed healthcare Reits in Asia.

PLife recently completed its third strategic recycling initiative with a divestment of a non-core asset and acquired two nursing homes in Japan, increasing its geographical coverage and further diversification of age-care tenants.

Some may remember Aims Apac Reit as MacarthurCook Industrial Reit which listed in April 2007 with a portfolio of 12 industrial properties in Singapore valued at S$316 million.

The Reit has since rebranded itself in 2019 and has grown over five times in size with a portfolio value of S$1.7 billion across 28 properties in Singapore and Australia.

Its tenant base of 188 tenants has also diversified across the years, and include resilient sectors such as logistics and warehouses, bio-medical and life science, telecommunications and data centre operators accounting for seven out of its top 10 tenants.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - 10 S-Reits yielding long-term annualised returns

Capitaland India Trust / Equity Bottom-Up

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In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust. 
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions. 
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/s-reits-recent-acquisitions-further-entrench-diversity">read </a>the original version.
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    Recent SREIT


In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust.  
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions.  
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits' recent acquisitions further entrench diversity

Key Singapore Market Moves and Flows in July

Mapletree Industrial Trust / Equity Bottom-Up

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 <div class='content-caption'>SREITs leaders index</div>
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In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge S-Reit index, widely regarded as one of S-Reits' barometers, and a narrower subset of it, the iEdge S-Reit Leaders Index.

The iEdge S-Reit Leaders Index is a narrow, tradable, adjusted free-float market capitalisation weighted index that measures the performance of the most liquid trusts in Singapore. Constituents must be listed on SGX and classified under Reits as defined by the Factset Revere Business Industry Classification System. The trust must also have free float of at least 20 per cent and a free float market capitalisation of at least S$500 million.

All eligible trusts are screened for liquidity at the semi-annual rebalancing in March and September. To enter the iEdge S-Reit Leaders Index, eligible trusts must trade at least US$500,000 in daily turnover and a 0.10 per cent daily trading velocity of the free float market capitalisation.

To maintain an existing place, constituents must maintain US$400,000 in daily turnover and a 0.08 per cent daily trading velocity of the free float market capitalisation. 
Following Lendlease Global Commercial REIT’s (LREIT) addition in March 2021, there are currently 27 constituents in the iEdge S-REIT Leaders Index. 
LReit has a diversified portfolio comprising of a leasehold interest in, 313@somerset, a prime retail property located in Singapore and a freehold interest in Sky Complex, which comprises three grade-A office buildings located in Milan.

In October 2020, LReit acquired a 5.0 per cent stake in Lendlease Asian Retail Investment Fund 3, which indirectly holds a 75.0 per cent interest in Jem, an integrated office and retail development in Singapore.

Comparing total returns, the iEdge S-Reit Leaders Index (-0.9 per cent), proved to be more resilient than the broader iEdge S-Reit Index (-2.6 per cent) and the FTSE EPRA/Nareit Global Reits Index (-12.0 per cent) last year.

Though the iEdge S-Reit Leaders Index (+4.0 per cent) lagged the global benchmark (+25.1 per cent) in 2021 year-to-date, it outperformed in the long term. The five-year total returns of the iEdge S-Reit Leaders Index came in at 60.6 per cent versus FTSE EPRA/Nareit Global Reit Index's 28.2 per cent. This was mostly led by S-Reits with data centre, industrial, and healthcare assets. 
The constituents with the highest five-year total returns include: Keppel DC REIT (+175.6 per cent), Mapletree Logistics Trust (+168.0 per cent), ParkwayLife REIT (+133.2 per cent), Mapletree Industrial Trust (+123.9 per cent) and Frasers Logistics and Commercial Trust (+113.8 per cent). Together, the five trusts make up approximately 36 per cent of the overall index weightage.

Products tracking the iEdge S-Reit Leaders Index include the SGX iEdge S-Reit Leaders Index Futures and the Syfe Reit+ portfolio. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/iedge-s-reit-indices-barometers-for-s-reits">read </a>the original version.
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    SREITs leaders index


In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge S-Reit index, widely regarded as one of S-Reits' barometers, and a narrower subset of it, the iEdge S-Reit Leaders Index.

The iEdge S-Reit Leaders Index is a narrow, tradable, adjusted free-float market capitalisation weighted index that measures the performance of the most liquid trusts in Singapore. Constituents must be listed on SGX and classified under Reits as defined by the Factset Revere Business Industry Classification System. The trust must also have free float of at least 20 per cent and a free float market capitalisation of at least S$500 million.

All eligible trusts are screened for liquidity at the semi-annual rebalancing in March and September. To enter the iEdge S-Reit Leaders Index, eligible trusts must trade at least US$500,000 in daily turnover and a 0.10 per cent daily trading velocity of the free float market capitalisation.

To maintain an existing place, constituents must maintain US$400,000 in daily turnover and a 0.08 per cent daily trading velocity of the free float market capitalisation.  
Following Lendlease Global Commercial REIT’s (LREIT) addition in March 2021, there are currently 27 constituents in the iEdge S-REIT Leaders Index.  
LReit has a diversified portfolio comprising of a leasehold interest in, 313@somerset, a prime retail property located in Singapore and a freehold interest in Sky Complex, which comprises three grade-A office buildings located in Milan.

In October 2020, LReit acquired a 5.0 per cent stake in Lendlease Asian Retail Investment Fund 3, which indirectly holds a 75.0 per cent interest in Jem, an integrated office and retail development in Singapore.

Comparing total returns, the iEdge S-Reit Leaders Index (-0.9 per cent), proved to be more resilient than the broader iEdge S-Reit Index (-2.6 per cent) and the FTSE EPRA/Nareit Global Reits Index (-12.0 per cent) last year.

Though the iEdge S-Reit Leaders Index (+4.0 per cent) lagged the global benchmark (+25.1 per cent) in 2021 year-to-date, it outperformed in the long term. The five-year total returns of the iEdge S-Reit Leaders Index came in at 60.6 per cent versus FTSE EPRA/Nareit Global Reit Index's 28.2 per cent. This was mostly led by S-Reits with data centre, industrial, and healthcare assets.  
The constituents with the highest five-year total returns include: Keppel DC REIT (+175.6 per cent), Mapletree Logistics Trust (+168.0 per cent), ParkwayLife REIT (+133.2 per cent), Mapletree Industrial Trust (+123.9 per cent) and Frasers Logistics and Commercial Trust (+113.8 per cent). Together, the five trusts make up approximately 36 per cent of the overall index weightage.

Products tracking the iEdge S-Reit Leaders Index include the SGX iEdge S-Reit Leaders Index Futures and the Syfe Reit+ portfolio.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - iEdge S-Reit Indices: barometers for S-Reits

Singapore

Mapletree Logistics Trust is an Asia-focused logistics real estate investment trust. The Company invests in a diversified portfolio of income-producing real estate which is used for logistics purposes.

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Mapletree Logistics Trust (MLT SP)

Key Singapore Market Moves and Flows in 3Q21

In 3Q21, the STI saw its narrowest quarterly trading range since 3Q17, generating a 0.2% decline in total return, while the FTSE APAC Index...

Singapore Exchange Ltd (SGX)

REIT Watch - 10 S-Reits yielding long-term annualised returns

The 10 best performing S-Reits and property trusts with over a 10-year listing history have averaged 12.5 per cent in 10-year...

Singapore Exchange Ltd (SGX)

REIT Watch - S-Reits' recent acquisitions further entrench diversity

In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase...

Singapore Exchange Ltd (SGX)

Key Singapore Market Moves and Flows in July

The STI’s 1.2% gain in July brought its price gain over the first seven months to 11.4%, with dividends boosting the total return to 13.2%,...

Singapore Exchange Ltd (SGX)

REIT Watch - iEdge S-Reit Indices: barometers for S-Reits

In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge...

Singapore Exchange Ltd (SGX)

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52-week Range

Market Cap (USDm)

P/E

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