The 31 real estate investment trusts (Reits) and six stapled trusts listed on the Singapore Exchange gave investors an average total return of 17.6 per cent in the period from January to Aug 4, according to the Singapore Exchange (SGX).
Total returns, including dividends, ranged from as high as 30 per cent for CDL Hospitality Trusts to 8 per cent for Fortune Reit at the low end.
Institutions were net buyers of the Reit sector for the past four consecutive months, with cumulative inflows totalling $133.6 million, the SGX said in an update on Tuesday.
The SGX Reit 20 Index, a market cap-weighted benchmark that measures the performance of the 20 largest trusts in the sector, generated a 18.8 per cent total return in the first 31 weeks of the year. This was up from a total return of 16 per cent for the same period last year.
The higher return so far this year was also achieved with less volatility than seen last year. As of last Friday, the 20 constituents of the SGX Reit 20 Index had averaged a 180-day historical volatility of 13.9 per cent, compared with 18.9 per cent for the same period last year.
Ascendas Reit, the largest Reit here by market cap, noted in its quarterly report on July 27 that the United States Federal Reserve had stayed dovish in its most recent policy statement, in view of weaker US inflation data.
"Prospects of another interest rate hike by the end of the year have dimmed. As interest rates are not expected to rise as fast as expected, there may be a lower impact on DPU (distribution per unit," Ascendas Reit had said.
Singapore Reits are required to distribute at least 90 per cent of taxable income to unit holders each year to enjoy tax-exempt status.
More recently, investors have also been able to get broader exposure to Reits in the Asia-Pacific region via two Reit exchange-traded funds (ETFs) listed on the SGX.
These are the Phillip SGX Apac Dividend Leaders Reit ETF, listed in October last year, and the NikkoAM-StraitsTrading Asia ex Japan Reit ETF, which was listed in March.
From its launch to Aug 4, the Phillip SGX Apac Dividend Leaders Reit ETF has generated a 5.4 per cent total return. In the same period, the NikkoAM-StraitsTrading Asia ex Japan Reit ETF has generated an 8.7 per cent total return.