SGX S-Reits outperform benchmark MSCI World Reit Index

Top five best performers have averaged a total return of 21.2 per cent so far this year

The SGX S-Reit (real estate investment trust) Index of Singapore Exchange-listed Reits has significantly outperformed the benchmark MSCI World Reit Index, an SGX My Gateway report said yesterday.

The index generated a total return of 12.2 per cent from Jan 1 to July 8, while the MSCI World Reit Index generated a total return of 7.6 per cent in Singapore dollar terms over the same period.

The report said Singapore's Reit sector comprises 31 Reits and six stapled trusts, which refer to those such as hospitality trusts.

Recent additions to the SGX this year were Manulife US Reit on May May 20 and Frasers Logistics & Industrial Trust on June 21.

Reits are favoured by investors here as they consistently outperform the Straits Times Index, and are also highly prized in a low interest rate environment.


Keppel Reit and Keppel DC Reit were among the five best-performing S-Reits. Reits are favoured by investors here as they consistently outperform the Straits Times Index. PHOTO: KEPPEL

The SGX S-Reit Index is a "free-float, market capitalisation-weighted index that measures the performance of stocks operating within the Reit sector", said the report.

The index has 34 constituents, which have a combined market capitalisation of more than $64 billion.

The five best-performing Reits in the index this year so far are Saizen Reit, which owns Japanese residential properties; Mapletree Industrial Trust; Suntec Reit, which owns malls; office trust Keppel Reit; and Keppel DC Reit, which holds data centre properties.

Saizen Reit has gained 26.4 per cent so far this year and Mapletree Industrial Trust 22 per cent. Suntec Reit has gained 19.9 per cent, Keppel Reit 19.3 per cent and Keppel DC Reit 18.6 per cent.

"These five trusts averaged a total return of 21.2 per cent in the year to July 8," said SGX My Gateway.

The local Reit index also maintained a dividend yield of 6.8 per cent, compared with the MSCI World Reit Index, which had a yield of 4 per cent.

The report noted that Reits raise capital to purchase primarily real estate assets, usually with a view to generate income for unit holders of the fund.

"A Reit 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," it said.

The stability of regular income is a draw for investors, especially in a a volatile market which has been rocked by recessionary fears triggering the January crash, as well as by the Brexit vote in Britain and other global events.

A version of this article appeared in the print edition of The Straits Times on July 12, 2016, with the headline 'SGX S-Reits outperform benchmark MSCI World Reit Index'. Print Edition | Subscribe