Looking Back on 2017: Best Performing REITS in Singapore 2017
REITS were the investment darling of 2017. However, not all Singapore REITS (SREITs) performed as well as the others.
We single out the 8 best performing SREITs in terms of price gains for 2017. The price performance of these REITS during the past year had been remarkable, outperforming price gains for some blue chip stocks or even mid cap stocks. Below is a snapshot of the best REITS for 2017:
|Singapore REITS||2017 price gain|
|Capitaland Commercial Trust||33%|
|Mapletree Greater China Commercial Trust||31%|
|Mapletree Logistics Trust||31%|
|CDL Hospitality Trusts||30%|
|Viva Industrial Trust||25%|
|Parkway Life REIT||25%|
CapitaLand Commercial Trust
First up on the list is Capitaland Commercial Trust, one of the top commercial REIT performers in Singapore with price gains topping 33% during the year. Its properties are mainly concentrated around Singapore’s Central Business District and it has an 18% stake in Malaysia listed commercial REIT MRCB-Quill REIT. Asia Square Tower 2, CapitaGreen and HSBC Buildings are some Grade A office buildings crown jewels under its wings with high profile MNC tenants. A strong recovery in grade A office market has buoyed most commercial REITS and Capitaland Commercial Trust being a large cap REIT player has been investor’s favourite throughout 2017. Its tenant mix is top notch paymasters and has served its unitholders well via regular dividend distributions. Capitaland is also Singapore’s top property developer with strong property development expertise. Its Q3 2017 results were fairly positive with a 2.6% increase in DPU due to contribution from CapitaGreen.
Mapletree Greater China Commercial Trust
Closing in on 2nd place is Mapletree Greater China Commercial Trust, where prices per unit surged 31%. It is a direct China commercial property play, with 3 commercial properties spread across vibrant cities Hong Kong, Beijing and Shanghai, all pole centers for commercial activities. Its Q3 2017 financials announcement saw growth in DPU by 6%, where its Hong Kong’s Festival Walk retail mall and Beijing’s Gateway Plaza contributing higher average rental rates. This REIT has silently delivered outstanding price performance for investor for whole of year 2017, outperforming some of its well-known Singapore based REIT counterparts.
Mapletree Logistics Trust
On 3rd place of the podium stand is Mapletree Logistics Trust, giving investors 31% price gains, almost identical to Mapletree Greater China Commercial Trust. The trust is focused on logistics properties as the name suggests, and has a global appeal with logistics properties spread across Australia, Singapore, Hong Kong, China, Japan, South Korea and even Vietnam. E-commerce growth is very much alive and kicking and logistics players from transportation to storage will benefit strongly from the ongoing boom. Its quarterly results for period ended 30 September 2017 saw NPI rising 3%, with strong fundamentals backing its share price rise.
Suntec REIT, owner of the popular convention center Suntec City among Singapore households, delivered 30% price gains to investors for the whole of 2017. Suntec REIT’s properties are located both in Singapore and Australia. Suntec REIT does not only own Suntec Singapore, but has stake in One Raffles Quay, Marina Bay Financial Tower and 9 Penang Road. Q3 2017 financial performance remained fairly stable with slight dip of 2.1% in DPU on the back of improving performance by Suntec Singapore. Recovery of Grade-A office rates for 2017 going into 2018 has been a boon to Suntec REIT and other commercial REIT players.
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CDL Hospitality Trust
CDL Hospitality Trust, owner of hotels operating in the hospitality sector catering the business and leisure travellers posted outstanding price gains in 2017 at 30%. Its property portfolios are scattered all over the world in major cities from Tokyo to Perth with huge tourist arrivals and business travellers every single year. CDL HTrust provides excellent geographical diversification, backed by world class hotels run by solid management team. Its Singapore portfolio makes up 58% of total property portfolio, with the remaining 42% strategically located in other major cities. It is always on the hunt for quality hospitality assets with the latest being the acquisition of Manchester hotel. Its track record is backed by an attractive dividend yield of 5.95% per annum, making it one of the best REIT in Singapore.
Viva Industrial Trust
Viva Industrial Trust, a REIT operating in the industrial space charted strong 25% price gains for 2017. It is another REIT with exposure to the commercial sector via ownership in large business parks occupying huge land area, catering to IT sector and data centres. DPU as at Q3 2017 increased 5%, where its Viva Business Park provided a boost to gross revenue and overall portfolio occupancy edging up 2.3%. It is the best industrial REIT among all Singapore REITS, taking the spotlight away from its other REIT peers in the segment.
Parkway Life REIT
Parkway Life REIT, a niche REIT with ownership of 49 healthcare based buildings spread across Singapore and Japan, has seen its price rising 25% for 2017. The healthcare REIT backed by reputable healthcare operator posted strong DPU gains at 10% for Q3 2017, backing its impressive unit price run up for 2017. Even stripping out one time divestment gain, core DPU registered 2.8% gains for the quarter. Healthcare spending in aging demographics such as Singapore and Japan is projected to rise further and top quality healthcare providers will stand out from the competition, with Parkway Life well positioned for the trend shift and healthcare upgrade by customers.
Keppel REIT, a local favourite among Singapore investors, closed out 2017 with an impressive 25% price gains as well, rising on the Grade A office demand boom in Singapore. The joint owner of Marina Bay Financial Center, One Raffles Quay and Ocean Financial Centre does not boast huge number of properties but distributions has been stable with their properties’ strategic location and Grade A status. Latest 3Q 2017 results has not been the best with a 13% fall in DPU but analysts are upbeat on the continued recovery of Grade A office rents which has benefited investors holding on tightly to the REIT.