Singapore’s REIT Sector Averages 6.7% Dividend Yield

This article was originally published on SGX's investor education portal, My Gateway, and is republished with permission. 

• Singapore’s REIT sector is made up of 32 REITs and six Stapled Trusts. Together, the 38 trusts have an average dividend yield of 6.7%, which is higher than the STI’s 3.9% and MSCI World REIT Index’s 3.9%.
• The five trusts with the highest dividend yields are Viva Industrial Trust, Sabana Shariah Compliant Industrial REIT, Soilbuild Business Space REIT, Lippo Malls Indonesia Retail Trust, and Cache Logistics Trust, averaging dividend yields of 9.0%.
• Amongst the SGX S-REIT Index constituents, the top five performing constituents in the Index in the year thus far were: Saizen REIT (+73.1%), Mapletree Commercial Trust (+30.2%), Keppel REIT (+28.4%), Fortune REIT (+28.4%), and Mapletree Greater China Commercial Trust (+28.3%).

S&P Dow Jones and MSCI Inc. announced earlier this year the creation of a new Real Estate Sector under the Global Industry Classification Standard (GICS®) structure. Real Estate, previously a sub-sector under Financials, now forms the 11th GICS® Sector (from 10) after the New York close on 31 August 2016. The GICS® structure is also used to classify stocks on SGX StockFacts.

Real Estate Investment Trusts (REITs), a sub-sector under Real Estate, raise capital to purchase primarily real estate assets, usually with a view to generate income for unit holders of the fund. It allows individual investors to access real property assets and share the benefits and risks of owning a portfolio of properties, which typically distribute income at regular intervals through dividends.

Singapore’s REIT Sector is made up of 32 REITs and six Stapled Trusts with a combined market capitalisation of over S$74 billion. Together, the 38 trusts have averaged a total return of 14.2% in 2016 thus far and are distributing an average dividend yield of 6.7%. This compares with a dividend yield of 3.9% for the Straits Times Index (STI) and a dividend yield of 3.9% for the MSCI World REIT Index. The MSCI World REIT Index comprises 70 constituents, with a combined market capitalisation of over US$951 billion. These constituents generate a majority of their revenue and income from real estate rental and leasing operations.

Located in Fusionopolis, Solaris is the most expensive building in the Soilbuild REIT portfolio. Company photoThe five trusts with the highest dividend yields are Viva Industrial Trust, Sabana Shariah Compliant Industrial REIT, Soilbuild Business Space REIT, Lippo Malls Indonesia Retail Trust, and Cache Logistics Trust, averaging dividend yields of 9.0%.

The SGX S-REIT Index is a free-float, market capitalisation-weighted index that measures that performance of stocks operating within the REIT Sector. The index is made up of 34 constituents, with a combined market capitalisation of more than S$68 billion and average dividend yield of 6.6%. The SGX S-REIT Index generated 17.3% in total return for the year to date thus far.

The top five performing constituents in the Index in the year thus far were: Saizen REIT^# (+73.1%), Mapletree Commercial Trust (+30.2%), Keppel REIT (+28.4%), Fortune REIT (+28.4%), and Mapletree Greater China Commercial Trust (+28.3%). These five trusts averaged a total return of 37.7% in the year to date.

The 38 trusts of Singapore’s REIT sector are listed in the table below, and is sorted according to market capitalisation. Click on each stock to visit its profile page on SGX StockFacts.

New REIT listings in 2016 include Manulife US REIT, Frasers Logistics & Industrial Trust, and EC World REIT.

* In USD Terms

**BHG Retail REIT listed in Dec 2015, distribution consists solely of capital component for the period from 11 Dec 2015 to 30 Jun 2016.

#Saizen REIT issued a special distribution of S$1.056 per unit to unit holders earlier in March this year upon sale of its portfolio of Japanese properties. It has announced on 15 Aug 2016 a framework agreement for the proposed acquisition of industrial properties in Australia as part of a reverse takeover by SDPSL, an indirect wholly-owned subsidiary of Sime Darby Berhad.

Source: SGX, Bloomberg & SGX StockFacts (data as of 7 September 2016)