The 10 REITs on SGX that report revenues to China have a combined market cap of nearly S$18 billion. S-REITs were among the best-performing sectors in the months of Nov, Dec and Jan. S-REITs was also the top net buy sector last month, garnering net institutional inflows of S$82.7 million.
Among these 10 China-related REITs, the five best performers in the YTD were: Mapletree North Asia (+10.5%), OUE Commercial (+10.4%), Ascott Residence (+9.2%), Mapletree Logistics (+8.8%), and EC World REIT (+8.0%). They averaged a total return of +9.4% in the YTD.
The five largest real estate developers on SGX that report more than one-third of total revenues to China have a combined market cap of about S$18 billion. In the YTD, the three best performers were: Yanlord Land (+14.8%), Ying Li (+7.8%), and CapitaLand (+7.1%).

There are 34 Real Estate Investment Trusts (REITs), five Stapled Trusts and three property trusts listed on SGX. The sector has a combined market capitalisation of close to S$90 billion, with Retail, Industrial and Office REITs making up the largest segments.

Amidst a challenging market environment, Singapore REITs were among the best-performing sectors on SGX for three consecutive months, registering total returns of 2.3%, 0.3% and 7.9% respectively in November, December and January. REITs was also the top net buy sector last month, garnering net institutional inflows of S$82.7 million, SGX data showed.

Analysts have noted revived investor interest in S-REITs since the fourth quarter of 2018, driven by a flight to safety amidst rising risk-aversion, as US-Sino trade tensions continued to simmer, and global equity markets remained volatile.

The relatively strong fundamentals of S-REITs – about 80% of the trusts across various segments have hedged at least 70% of their debt with fixed rates, while all are required by regulation to have a maximum gearing ratio of 45% – should also help mitigate the negative impact of a rising interest-rate environment.

There are 10 REITs listed on SGX that report revenues to China, and they have a combined market capitalisation of nearly S$18 billion. These 10 trusts have averaged a total return of +6.6% in the 2019 year-to-date and a dividend yield of 7.2%.

In the YTD, the five best-performing REITs with China revenues were: Mapletree North Asia Commercial Trust (+10.5%), OUE Commercial REIT (+10.4%), Ascott Residence Trust (+9.2%), Mapletree Logistics Trust (+8.8%), and EC World REIT (+8.0%). These five REITs have averaged a total return of +9.4% in the YTD, bringing their one-year and three-year total returns to +4.9% and +43.7% respectively.

YTD Total Returns of Best-Performing China-Related REITs (%)

The table below details the 10 REITs on SGX that report revenues to China, sorted by YTD total returns.

Name	SGX Code	Market Cap S$M	2019 YTD Total Returns (%)	1Y Total Return (%)	3Y Total Return (%)	Dividend Yield	P/B (x)	% Revenue from China
Name	SGX Code	Market Cap S$M	2019 YTD Total Returns (%)	1Y Total Return (%)	3Y Total Return (%)	Dividend Yield	P/B (x)	% Revenue from China
Mapletree North Asia Commercial Trust	RW0U	3,926	10.5	13.0	90.8	5.8	1.0	30.7
OUE Commercial REIT	TS0U	1,415	10.4	-16.1	16.2	7.5	0.7	18.1
Ascott Residence Trust	A68U	2,477	9.2	3.7	33.5	6.2	0.8	10.5
Mapletree Logistics Trust	M44U	4,847	8.8	16.7	78	6.4	1.1	6.6
EC World REIT	BWCU	590	8.0	7.4	0.0	7.0	0.9	100
CapitaLand Retail China Trust	AU8U	1,363	5.7	-3.2	26.3	7.2	0.9	100
Sasseur REIT	CRPU	808	5.4	0.0	0.0	-	0.9	100
Starhill Global REIT	P40U	1,505	3.1	-0.6	13.6	8.2	0.8	2.3
BHG Retail Trust	BMGU	368	2.1	4.7	9.9	8.8	0.9	100
Dasin Retail Trust	CEDU	491	1.7	14.3	0.0	7.8	0.6	100
Average			6.5	4.0	26.8	7.2	0.8

Source: SGX StockFacts and Bloomberg (Data as of 13 February 2019)

Note:

Mapletree North Asia Commercial Trust, Starhill Global REIT, CapitaLand Retail China Trust, Sasseur REIT, Dasin Retail Trust and BHG Retail Trust are involved in the leasing and operation of retail property and infrastructure in China and HK
OUE Commercial REIT owns an office and retail property in Shanghai
Ascott Residence Trust owns seven serviced residences in cities across China
Mapletree Logistics Trust and EC World REIT manage diversified portfolios focused on e-commerce, shipping, logistics and supply chain management

As for real estate developers on SGX, the five largest that report more than one-third of their total revenues to China have a combined market capitalisation of S$17.7 billion. Among these five developers, the three best performers in the YTD were: Yanlord Land (+14.8%), Ying Li International (+7.8%), and CapitaLand (+7.1%). Note that Yanlord and Ying Li reported 100% of their revenues to China, while CapitaLand and First Sponsor reported 27.04% and 32.24% revenues to China respectively.

YTD Total Returns of China-Related Developers (%)

The table below details the five real estate developers that report revenues to China, sorted by YTD total returns.

Name	SGX Code	Market Cap S$M	YTD Total Return (%)	1Y Total Return (%)	3Y Total Return (%)	Dividend Yield	P/E
Name	SGX Code	Market Cap S$M	YTD Total Return (%)	1Y Total Return (%)	3Y Total Return (%)	Dividend Yield	P/E
Yanlord Land Group	Z25	2,704	14.8	-9.5	41.9	4.7	2.8
Ying Li Intl Real Estate	5DM	320	7.8	-8.1	-3.1	-	6.9
CapitaLand*	C31	13,862	7.1	-2.3	28.9	3.6	9.6
First Sponsor Group^	ADN	798	-3.9	-5.7	15.4	1.7	9.2
Pan Hong Holdings	P36	36	-12.5	-16.8	50.5	20.3	-
Average			2.6	-8.5	26.7	7.1	7.1

Source: SGX StockFacts and Bloomberg (Data as of 13 February 2019)

*Reported 27.0% revenue to China in last FY

^Reported 32.2% revenue to China in last FY

China’s Growth Outlook

Earlier this week, China posted a surprise 9.1% YoY jump in its January exports, surpassing most economists’ forecasts of a contraction. This comes after its December exports unexpectedly shrank 4.4% YoY, the most in two years.

This year, the World Bank expects a further slowdown in the world’s second-largest economy, as headwinds increase amidst heightened trade tensions. The agency has forecast economic growth of 6.2% in 2019, slightly below previous projections as a result of weaker exports, and down from 6.5% expansion in 2018, it said in the January edition of its “Global Economic Prospects” report.

Between 1999 and 2014, China has averaged a significantly stronger annual economic growth rate of 9.6%, reaching as high as over 14% in 2007. In recent years, the moderation in its economic growth rates, which still remain above the developing-economy average, has coincided with the government’s policy of pursuing high-quality, rather than high-speed, growth.

Highlights of China-Related S-REITs and Developers

The 10 REITs on SGX that report revenues to China have a combined market cap of nearly S$18 billion. S-REITs were among the best-performing...

Singapore Exchange Ltd (SGX)

March Quarter Earnings of SGX’s Largest Office REITs

Singapore Exchange Ltd (SGX)

Keppel-KBS US REIT – US-Focused Office REIT Debuts on SGX

Singapore Exchange Ltd (SGX)