Best performing REITs year to date

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For the year to date until 22nd Jan, REITs have returned on average 2.6%. On an annualized basis, returns would be close to 50%. However, that large number is but of course due to the short term positive return.


 Returns will likely be volatile over the next few months as the Fed signals their intention to return to a normalized interest rate level – impacting interest rate sensitive REITs.

Those with higher gearing such as IREIT Global, Mapletree Greater China Commercial Trust, Soilbuild REIT and Viva Industrial Trust may be at risk due to higher interest burdens.

The returns for the various sectors are as follows:

Office: 2.8%
Retail: 1.8%
Industrial: 2.5%
Hospitality: 4.2%
Healthcare: 0.9%
Data centre (only Keppel DC REIT): 3.5%
Others (only Cromwell European REIT): 5.4%

With the exception of “Others” which consist of only Cromwell European REIT, the hospitality sector performed well, driven by improving business sentiment around the world.

Also read: Top 3 Influences of Technology on Real Estate

This has led to increased passenger movement for business and leisure, benefitting the hospitality sector.

In general, most REITs have shown positive return except for Capitaland Commercial Trust, Capitaland Mall Trust and Frasers Logistics & Industrial Trust.

REIT returns year to 22 Jan 2018

In the office sector, Manulife US REIT provided the highest return at 6.6% followed by Keppel REIT at 5.6%. At the other end, Capitaland Commercial Trust had a negative return of -0.5%.

In the retail sector, BHG Retail REIT had the highest return at 4.1% followed by Frasers Centrepoint Trust at 3.6%. At the other end, Capitaland Mall Trust has a negative return of -2.8%.

In the industrial sector, Soilbuild REIT had the highest return of 5.2% followed by Sabana REIT at 5.1%. At the other end, Frasers Logistics & Industrial Trust had a negative return of -0.9%.

Also read: Capitaland’s sale of 20 China malls

On average, REITs are yielding 6.0%, but based on a Bloomberg consensus forecast, yields are expected to expand to 6.2% in the near future.

The full list of REITs and their details can be found at our REIT data page.

 


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