4 Things You Should Know About China-Based Singapore REITs Now

In this article, we will look at four of the most interesting things about these REITs (from an SGX report) that investors might have missed.

Market-beating returns

These 10 China-related REITs averaged a total positive return of +15.7% year-to-date in 2019, bringing their one-year and three-year total returns to +10.9% and +24.5%, respectively.

The above returns came in stronger than the Straits Times Index (SGX: ^STI) which delivered one-year and three year returns of -5.7% and +14.6%, respectively.

Top performers

Not all China-based REITs are created equally though. Below are the top five best-performing REITs year-to-date along with their percentage gains in 2019 (as of 6 June).

1. Sasseur Real Estate Investment Trust (SGX: CRPU) — +29.2%
2. Mapletree Logistics Trust (SGX: M44U) — +24.9%
3. Mapletree North Asia Commercial Trust (SGX: RW0U) — +22.9%
4. Ascott Residence Trust (SGX: A68U) — +20.7% and;
5. Capitaland Retail China Trust (SGX: AU8U) — +17.1%.

Comparatively, the STI index was up by about 5% during this period.

Worst performers still did alright

Two of the worst performers in this China group year-to date are Dasin Retail Trust (SGX: CEDU) and BHG Retail REIT (SGX: BMGU). Yet, their performance wasn’t actually that that bad. The former delivered +4.8% returns while the latter achieved +2.0% during the period.

Valuations not expensive

Another thing worth paying attention to here is that as a group, these REITs have a rather attractive valuation. According to SGX’s report, the group averaged a 12-month indicative dividend yield of 6.7% and a price-to-book (PB) ratio of 0.8.

Comparatively, the average dividend yield and PB ratio of all Singapore REITs (based on OCBC Weekly S-REITs Tracker) are 6.6% and 1.01, respectively. In other words, these REITs are not expensive despite delivering market-beating returns this year.