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S-Reits also contributed to 25% of the overall day-to-day turnover of Singapore’s stock market, even though it only made up 12% of the total stock market capitalisation at 2019’s end.
The year 2019 was very good for Singapore real estate investment trusts (S-Reits) and stapled and property trusts, as they achieved a record in secondary fundraisings and outpaced the broader market, reported The Business Times.
S-Reits also contributed to 25% of the overall day-to-day turnover of Singapore’s stock market, even though it only made up 12% of the total stock market capitalisation at 2019’s end.
According to a report released by the Singapore Exchange (SGX) on Monday, 35 S-Reits, two property trusts and six stapled trusts contributed 24% of the day-to-day turnover of the country’s stock market.
All this, while they maintained a combined market value of S$111.9 billion, out of the overall market cap of S$937.8 billion for the total universe at the end of 2019.
They also had an average total returns of 23% in 2019 and finished the year with a 6% distribution yield average.
Of the 43 trusts, outpaced the 9.4% overall return of the Straits Times Index (STI). On the average, those 43 trusts recorded a 23% total return for 2019, while the other 39 trusts listed for the whole duration of the year had an average of 26% total return.
S-Reits also fared well when compared to its global counterparts.
Global Reits posted a median total return of 21% in 2019, with total returns referring to accumulative returns having the assumption that dividends are reinvested into shares or units on the ex-dividend date.
Analysts believe that the strong performance of Reits can be due to various reasons ranging from the US Federal Reserve’s turn to a dovish stance in mid-2019 to the macro uncertainty causing investors to take defensive yield instruments.
The strongest performers within the S-Reit sector were Ascendas Hospitality Trust (pre-merger with Ascott Residence Trust), Ascendas India Trust, Mapletree Commercial Trust,
Keppel DC Reit and Sasseur Reit.
In relation to the secondary fundraising front, the trusts contributed $5.22 billion to the total S$5.92 billion in placements recorded in 2019. Much of this could be due to OUE Commercial Reit’s contribution of S$1.42 billion related to its merger with OUE Hospitality Trust.
Not including the OUE Commercial Reit fundraising, 18 trusts posted a record $6.24 billion out of the total S$7.4 billion in placements and rights issues of SGX-listed during 2019.
If the OUE Commercial Reit’s placements are included, 19 trusts generated S$7.66 billion out of a combined S$8.82 billion in secondary fundraisings for 2019.
Index inclusion will, meanwhile, still be pursued by S-Reits, not just on the STI but also on the global indices.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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