SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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Prices and rentals of Singapore industrial spaces continued to rise in the first quarter of 2022, despite a dip in the overall occupancy rate, according to the quarterly market report published by JTC.

In Q1 2022, the overall occupancy rate fell to 89.8 per cent, a drop of 0.4 percentage points compared to the previous quarter, due to new completions picking up significantly, and increase in supply exceeding new demand.

Despite the drop in occupancy, price and rental indices of all industrial space rose by 2.1 per cent and 1.0 per cent respectively compared to the previous quarter. 
SGX lists 8 industrial S-Reits, of which 6 have exposure to Singapore-based industrial assets.

These 6 trusts are AIMS Apac Reit, Ascendas Reit, ESR-Logos Reit, Mapletree Industrial Trust, Mapletree Logistics Trust and Sabana Industrial Reit. Assets of Daiwa House Logistics Trust and EC World Reit are based in Japan and China respectively.

AIMS Apac Reit reported higher FY22 gross revenue and net property income (NPI) of S$142.4 million and S$103.2 million, rising 16.1 per cent and 17.9 per cent year on year respectively. 
The improved performance was mainly attributed to contributions from recently acquired assets as well as higher rental and recoveries for several Singapore assets. 
Ascendas Reit’s March 2022 occupancy rate of 90.0 per cent for its Singapore portfolio was 0.2 per cent lower compared to a quarter ago, but 3.1 per cent higher than a year ago. 
The Reit recorded an average portfolio rent reversion of 3.9 per cent for Singapore leases renewed in Q1 2022 and expects rental reversion across its overall portfolio for FY22 to be in the positive low single-digit range in view of current market uncertainties. 
ESR-Logos Reit (E-LOG) started trading on May 5, following the successful merger of ESR-Reit and ARA Logos Logistics Trust. 
The Reit’s asset portfolio is valued at S$5.5 billion across Singapore and Australia and it intends to actively leverage on the initial sponsor pipeline of approximately US$2 billion of visible and executable pipeline across key gateway markets in the Asia-Pacific. 
Mapletree Industrial Trust (MIT) announced FY21/22 distribution per unit (DPU) of 13.8 cents, an increase of 10.0 per cent year on year. 
MIT reported higher average overall portfolio occupancy for Q4 FY21/22 compared to the previous quarter, mainly due to improved occupancy of the Singapore portfolio especially among business park buildings and flatted factories. 
Mapletree Logistics Trust’s (MLT) FY21/22 amount distributable to unitholders grew 17.3 per cent year on year to S$390.7 million, while DPU rose 5.5 per cent to 8.787 cents. 
MLT observed that the leasing market in Singapore remains stable with demand boosted by e-commerce growth and business inventory stockpiling. 
Sabana Industrial Reit, in its Q1 2022 business update, reported healthy occupancy of 85.2 per cent and positive rental reversion of 4.0 per cent. 
The Reit noted that this is the 8th quarter in the past 9 quarters where positive reversion was achieved. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/tenant-sales-back-at-pre-covid-levels-for-retail-s-reits"> </a><a href="https://www.businesstimes.com.sg/companies-markets/industrial-s-reits-report-positive-rental-reversions">read </a>the original version.
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    REIT Watch


Prices and rentals of Singapore industrial spaces continued to rise in the first quarter of 2022, despite a dip in the overall occupancy rate, according to the quarterly market report published by JTC.

In Q1 2022, the overall occupancy rate fell to 89.8 per cent, a drop of 0.4 percentage points compared to the previous quarter, due to new completions picking up significantly, and increase in supply exceeding new demand.

Despite the drop in occupancy, price and rental indices of all industrial space rose by 2.1 per cent and 1.0 per cent respectively compared to the previous quarter.  
SGX lists 8 industrial S-Reits, of which 6 have exposure to Singapore-based industrial assets.

These 6 trusts are AIMS Apac Reit, Ascendas Reit, ESR-Logos Reit, Mapletree Industrial Trust, Mapletree Logistics Trust and Sabana Industrial Reit. Assets of Daiwa House Logistics Trust and EC World Reit are based in Japan and China respectively.

AIMS Apac Reit reported higher FY22 gross revenue and net property income (NPI) of S$142.4 million and S$103.2 million, rising 16.1 per cent and 17.9 per cent year on year respectively.  
The improved performance was mainly attributed to contributions from recently acquired assets as well as higher rental and recoveries for several Singapore assets.  
Ascendas Reit’s March 2022 occupancy rate of 90.0 per cent for its Singapore portfolio was 0.2 per cent lower compared to a quarter ago, but 3.1 per cent higher than a year ago.  
The Reit recorded an average portfolio rent reversion of 3.9 per cent for Singapore leases renewed in Q1 2022 and expects rental reversion across its overall portfolio for FY22 to be in the positive low single-digit range in view of current market uncertainties.  
ESR-Logos Reit (E-LOG) started trading on May 5, following the successful merger of ESR-Reit and ARA Logos Logistics Trust.  
The Reit’s asset portfolio is valued at S$5.5 billion across Singapore and Australia and it intends to actively leverage on the initial sponsor pipeline of approximately US$2 billion of visible and executable pipeline across key gateway markets in the Asia-Pacific.  
Mapletree Industrial Trust (MIT) announced FY21/22 distribution per unit (DPU) of 13.8 cents, an increase of 10.0 per cent year on year.  
MIT reported higher average overall portfolio occupancy for Q4 FY21/22 compared to the previous quarter, mainly due to improved occupancy of the Singapore portfolio especially among business park buildings and flatted factories.  
Mapletree Logistics Trust’s (MLT) FY21/22 amount distributable to unitholders grew 17.3 per cent year on year to S$390.7 million, while DPU rose 5.5 per cent to 8.787 cents.  
MLT observed that the leasing market in Singapore remains stable with demand boosted by e-commerce growth and business inventory stockpiling.  
Sabana Industrial Reit, in its Q1 2022 business update, reported healthy occupancy of 85.2 per cent and positive rental reversion of 4.0 per cent.  
The Reit noted that this is the 8th quarter in the past 9 quarters where positive reversion was achieved.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Industrial S-Reits report positive rental reversions

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For the 5 trading sessions spanning Apr 29 to May 5, the Straits Times Index (STI) gained 0.3 per cent, with the FTSE China A50 Index gaining 0.3 per cent, the Hang Seng Index gaining 2.5 per cent and the FTSE Bursa Malaysia KLCI declining 0.7 per cent. 

Overall, institutions were net buyers of Singapore stocks over the 5 sessions with S$67 million of net inflow, following S$53 million of net outflow for the preceding 5 sessions.

OCBC, Keppel Corporation, Singapore Telecommunications, Venture Corporation and Jardine Cycle &amp; Carriage led the net institutional outflows for the 5 sessions through to May 5.

Meanwhile, Yangzijiang Financial Holdings, UOB, Mapletree Logisitics Trust, Mapletree Industrial Trust and Thai Beverage received the highest net institutional outflows for the 5 sessions.

Overall, the total net institutional inflows into Singapore stocks in the 2022 year to May 5 came up to S$452 million, while the STI generated an 8.4 per cent total return. Share Buybacks 
There were 12 primary-listed stocks conducting share buybacks over the 5 sessions with a total consideration of S$44.5 million, up from S$10.5 million for the preceding week. 
Wilmar International, Keppel Corporation and Hong Fok Corporation led the consideration tally. 
Wilmar bought back 5.4 million shares at an average price of S$4.41 per share. 
For the previous year’s mandate, it bought back 19.9 million shares, which represented 0.32 per cent of the company’s issued shares (excluding treasury shares). 
The buybacks followed the company reporting financials for its Q1 FY22 (ended Mar 31) on Apr 29. Wilmar reported that its Q1 FY22 core net profit increased by 18.8 per cent year on year to US$503.4 million, attributed to the strong performance in the plantation and sugar milling segment, which was aided by firm palm oil prices. The company also noted that it has officially commenced its first central kitchen operations in Hangzhou, China in early April 2022.  
On Adani Wilmar, the company noted that from an IPO valuation of US$4 billion when it listed on the National Stock Exchange of India on Feb 8, 2022, its market capitalisation had increased by more than 3 times to above US$13 billion as at Apr 28, 2022. 
In addition, the valuation for Shree Renuka Sugars, the 62.5 per cent owned Indian sugar subsidiary, has also gone up sharply from US$863 million on Dec 31, 2021 to US$1.6 billion as at Apr 28, 2022. 
The company added that commodity prices had surged since the onset of the Russian and Ukraine conflict in February 2022 and while the contribution from the Russian and Ukrainian investments is not material, the sustained high commodity prices would benefit its plantation and sugar milling segment in the coming months. Director and substantial shareholder transactions 
The 5 trading sessions saw 100 changes to director interests and substantial shareholdings filed for close to 40 primary-listed stocks. 
This included 18 company director acquisitions with no disposals filed, while substantial shareholders filed 3 acquisitions and 3 disposals. Yangzijiang Financial Holding 
The 5 sessions saw multiple directors of Yangzijiang Financial Holding (YZJFH) acquire shares in the company on the open market. 
YZJFH was spun off from Yangzijiang Shipbuilding Holdings, with the aim of unlocking value for the company’s shareholders. 
YZJFH intends to focus on investing in growth opportunities to achieve attractive risk-adjusted return, while seeking to provide a steady stream of dividends to shareholders through income generated from investment and fund management businesses. 
Shareholders in Yangzijiang Shipbuilding received shares of YZJFH via a dividend in-specie on a one-to-one basis. 
On Apr 29, YZJFH executive director and CEO Vincent Toe Teow Heng acquired 400,000 shares for a consideration of S$228,000 at 57.0 cents per share. 
Toe has over 25 years of experience in fund management and investment advisory, M&amp;A, IPO deals and fundraising, throughout Asia. 
Prior to joining ICHAM, a Singapore-based fund management company as managing director, he was an investment banker at UBS, DBS Bank and JP Morgan. 
Between Apr 29 and May 5, YZJFH lead independent director Chew Sutat acquired 312,000 shares for a consideration of S$164,820 at an average price of 52.8 cents per share. 
Chew was senior managing director and a member of Singapore Exchange’s executive management team for 14 years. 
Prior to joining SGX, he held senior roles at Standard Chartered Bank, OCBC Securities and DBS Bank, where he held varying portfolios in strategic planning and business development for institutional banking and private clients. 
Between May 4 and 5, YZJFH independent director Chua Kim Leng acquired 150,000 shares for a consideration of S$73,500 at an average price of 49.0 cents per share. 
He currently serves on the board of the Casino Regulatory Authority, United Overseas Insurance, ADDX and TEHO International. In 2018, Chua stepped down from his role as special adviser (financial supervision) at the Monetary Authority of Singapore after 25 years of distinguished service. Sabana Industrial REIT 
On Apr 28, Sabana Real Estate Investment Management CEO Donald Han Yong Lee acquired 100,000 units of Sabana Industrial Reit at 45.0 cents per unit. 
On Apr 21, Han noted that the Reit had renewed 44.1 per cent of leases expiring this year and did so at positive rental reversion, while keeping the portfolio occupancy steady at 85.2 per cent. 
For its FY21 (ended Dec 31, 2021) the gross revenue of Sabana Industrial Reit increased by 14.2 per cent year on year to S$81.9 million with net property income increasing 16.4 per cent year on year to S$52.0 million. 
Han is an accomplished and respected consultant across most sectors in the property market, including industrial, having spent more than 30 years in various senior management and advisory positions. 
His experience ranges from residential agency to collective en bloc, office investment sales to retail leasing, regional hospitality and hotel disposition to international project marketing. JB Foods 
On Apr 29, JB Foods executive director and CEO Tey How Keong acquired 82,000 shares of the company for a consideration of S$40,180. 
At 49.0 cents per share, this increased his total interest in JB Foods from 46.78 per cent to 46.81 per cent. 
This followed his acquisition of 29,600 shares at 47.3 cents per share on Mar 23 and 400,000 shares at 52.0 cents per share on Dec 27. 
JB Foods core business is in the production and sale of cocoa ingredient products, namely cocoa mass, cocoa butter and cocoa powder. 
Tey is responsible for the overall strategic, management and business development of the group and has over 25 years of experience in the cocoa business. 
He recently noted that while recent price volatility in cocoa has put pressure on the group to carefully manage its pricing strategy and the pace of expansion, investment and the ramp up of manufacturing capacity, the easing of travel restrictions around the world will continue to fuel stable growth of the cocoa and chocolate industry. 
Tey added that the group remains optimistic that the overall cocoa consumption environment will continue on its growth trajectory post-pandemic. Baker Technology 
On May 4, Baker Technology executive director Benety Chang acquired 82,300 shares of the company at an average price of 43.9 cents per share. 
With a consideration of S$36,127 this increased his total interest in the from 52.92 per cent to 52.96 per cent. 
Prior to this he acquired 279,000 shares of the company at an average price of 44.8 cents per share on March 9. 
He is the major shareholder of the company and has extensive experience in the offshore oil and gas industry. A-Sonic Aerospace 
Between Apr 29 and May 4, A-Sonic Aerospace chief executive officer Janet LC Tan acquired 30,000 shares of the company for a consideration of S$21,300, at 71.0 cents per share. 
This took her total interest in the company from 59.94 per cent to 59.98 per cent. 
She has gradually increased her total interest in A-Sonic Aerospace from 53.35 per cent at the end of 2018. 
Tan has over 20 years of extensive experience in the aviation industry, with her responsibilities at A-Sonic Aerospace including the setting of the overall long-term business direction, developing business strategies, and implementing growth strategies for the A-Sonic Aerospace and its subsidiaries. 
On Apr 22, A-Sonic Aerospace announced it had submitted to SGX-ST an application to extend the cure period beyond Jun 4, 2022 to exit the SGX Watch List. Inside Insights is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/hong-fok-continues-buybacks-as-joint-ceo-raises-stake-0"> </a><a href="https://www.businesstimes.com.sg/companies-markets/wilmar-leads-buyback-tally-yzjfh-directors-acquire-shares">read </a>the original version.
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    Share buyback


For the 5 trading sessions spanning Apr 29 to May 5, the Straits Times Index (STI) gained 0.3 per cent, with the FTSE China A50 Index gaining 0.3 per cent, the Hang Seng Index gaining 2.5 per cent and the FTSE Bursa Malaysia KLCI declining 0.7 per cent. 

Overall, institutions were net buyers of Singapore stocks over the 5 sessions with S$67 million of net inflow, following S$53 million of net outflow for the preceding 5 sessions.

OCBC, Keppel Corporation, Singapore Telecommunications, Venture Corporation and Jardine Cycle &amp; Carriage led the net institutional outflows for the 5 sessions through to May 5.

Meanwhile, Yangzijiang Financial Holdings, UOB, Mapletree Logisitics Trust, Mapletree Industrial Trust and Thai Beverage received the highest net institutional outflows for the 5 sessions.

Overall, the total net institutional inflows into Singapore stocks in the 2022 year to May 5 came up to S$452 million, while the STI generated an 8.4 per cent total return.  Share Buybacks  
There were 12 primary-listed stocks conducting share buybacks over the 5 sessions with a total consideration of S$44.5 million, up from S$10.5 million for the preceding week.  
Wilmar International, Keppel Corporation and Hong Fok Corporation led the consideration tally.  
Wilmar bought back 5.4 million shares at an average price of S$4.41 per share.  
For the previous year’s mandate, it bought back 19.9 million shares, which represented 0.32 per cent of the company’s issued shares (excluding treasury shares).  
The buybacks followed the company reporting financials for its Q1 FY22 (ended Mar 31) on Apr 29. Wilmar reported that its Q1 FY22 core net profit increased by 18.8 per cent year on year to US$503.4 million, attributed to the strong performance in the plantation and sugar milling segment, which was aided by firm palm oil prices. The company also noted that it has officially commenced its first central kitchen operations in Hangzhou, China in early April 2022.   
On Adani Wilmar, the company noted that from an IPO valuation of US$4 billion when it listed on the National Stock Exchange of India on Feb 8, 2022, its market capitalisation had increased by more than 3 times to above US$13 billion as at Apr 28, 2022.  
In addition, the valuation for Shree Renuka Sugars, the 62.5 per cent owned Indian sugar subsidiary, has also gone up sharply from US$863 million on Dec 31, 2021 to US$1.6 billion as at Apr 28, 2022.  
The company added that commodity prices had surged since the onset of the Russian and Ukraine conflict in February 2022 and while the contribution from the Russian and Ukrainian investments is not material, the sustained high commodity prices would benefit its plantation and sugar milling segment in the coming months.  Director and substantial shareholder transactions  
The 5 trading sessions saw 100 changes to director interests and substantial shareholdings filed for close to 40 primary-listed stocks.  
This included 18 company director acquisitions with no disposals filed, while substantial shareholders filed 3 acquisitions and 3 disposals.  Yangzijiang Financial Holding  
The 5 sessions saw multiple directors of Yangzijiang Financial Holding (YZJFH) acquire shares in the company on the open market.  
YZJFH was spun off from Yangzijiang Shipbuilding Holdings, with the aim of unlocking value for the company’s shareholders.  
YZJFH intends to focus on investing in growth opportunities to achieve attractive risk-adjusted return, while seeking to provide a steady stream of dividends to shareholders through income generated from investment and fund management businesses.  
Shareholders in Yangzijiang Shipbuilding received shares of YZJFH via a dividend in-specie on a one-to-one basis.  
On Apr 29, YZJFH executive director and CEO Vincent Toe Teow Heng acquired 400,000 shares for a consideration of S$228,000 at 57.0 cents per share.  
Toe has over 25 years of experience in fund management and investment advisory, M&amp;A, IPO deals and fundraising, throughout Asia.  
Prior to joining ICHAM, a Singapore-based fund management company as managing director, he was an investment banker at UBS, DBS Bank and JP Morgan.  
Between Apr 29 and May 5, YZJFH lead independent director Chew Sutat acquired 312,000 shares for a consideration of S$164,820 at an average price of 52.8 cents per share.  
Chew was senior managing director and a member of Singapore Exchange’s executive management team for 14 years.  
Prior to joining SGX, he held senior roles at Standard Chartered Bank, OCBC Securities and DBS Bank, where he held varying portfolios in strategic planning and business development for institutional banking and private clients.  
Between May 4 and 5, YZJFH independent director Chua Kim Leng acquired 150,000 shares for a consideration of S$73,500 at an average price of 49.0 cents per share.  
He currently serves on the board of the Casino Regulatory Authority, United Overseas Insurance, ADDX and TEHO International. In 2018, Chua stepped down from his role as special adviser (financial supervision) at the Monetary Authority of Singapore after 25 years of distinguished service.  Sabana Industrial REIT  
On Apr 28, Sabana Real Estate Investment Management CEO Donald Han Yong Lee acquired 100,000 units of Sabana Industrial Reit at 45.0 cents per unit.  
On Apr 21, Han noted that the Reit had renewed 44.1 per cent of leases expiring this year and did so at positive rental reversion, while keeping the portfolio occupancy steady at 85.2 per cent.  
For its FY21 (ended Dec 31, 2021) the gross revenue of Sabana Industrial Reit increased by 14.2 per cent year on year to S$81.9 million with net property income increasing 16.4 per cent year on year to S$52.0 million.  
Han is an accomplished and respected consultant across most sectors in the property market, including industrial, having spent more than 30 years in various senior management and advisory positions.  
His experience ranges from residential agency to collective en bloc, office investment sales to retail leasing, regional hospitality and hotel disposition to international project marketing.  JB Foods  
On Apr 29, JB Foods executive director and CEO Tey How Keong acquired 82,000 shares of the company for a consideration of S$40,180.  
At 49.0 cents per share, this increased his total interest in JB Foods from 46.78 per cent to 46.81 per cent.  
This followed his acquisition of 29,600 shares at 47.3 cents per share on Mar 23 and 400,000 shares at 52.0 cents per share on Dec 27.  
JB Foods core business is in the production and sale of cocoa ingredient products, namely cocoa mass, cocoa butter and cocoa powder.  
Tey is responsible for the overall strategic, management and business development of the group and has over 25 years of experience in the cocoa business.  
He recently noted that while recent price volatility in cocoa has put pressure on the group to carefully manage its pricing strategy and the pace of expansion, investment and the ramp up of manufacturing capacity, the easing of travel restrictions around the world will continue to fuel stable growth of the cocoa and chocolate industry.  
Tey added that the group remains optimistic that the overall cocoa consumption environment will continue on its growth trajectory post-pandemic.  Baker Technology  
On May 4, Baker Technology executive director Benety Chang acquired 82,300 shares of the company at an average price of 43.9 cents per share.  
With a consideration of S$36,127 this increased his total interest in the from 52.92 per cent to 52.96 per cent.  
Prior to this he acquired 279,000 shares of the company at an average price of 44.8 cents per share on March 9.  
He is the major shareholder of the company and has extensive experience in the offshore oil and gas industry.  A-Sonic Aerospace  
Between Apr 29 and May 4, A-Sonic Aerospace chief executive officer Janet LC Tan acquired 30,000 shares of the company for a consideration of S$21,300, at 71.0 cents per share.  
This took her total interest in the company from 59.94 per cent to 59.98 per cent.  
She has gradually increased her total interest in A-Sonic Aerospace from 53.35 per cent at the end of 2018.  
Tan has over 20 years of extensive experience in the aviation industry, with her responsibilities at A-Sonic Aerospace including the setting of the overall long-term business direction, developing business strategies, and implementing growth strategies for the A-Sonic Aerospace and its subsidiaries.  
On Apr 22, A-Sonic Aerospace announced it had submitted to SGX-ST an application to extend the cure period beyond Jun 4, 2022 to exit the SGX Watch List.  Inside Insights is a weekly column on The Business Times, read the original version.



Wilmar leads buyback tally; YZJFH directors acquire shares

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The Straits Times Index (STI) gained more than 5 per cent in the 2022 year to date (YTD) till Feb 24, while the iEdge S-Reit Index declined close to 4 per cent during the same period amid expectations of rate hikes.

During last week's Thursday (Feb 24) session after Russia's announcement of a military operation in Ukraine, the STI and iEdge S-Reit Index dipped more than 3 per cent and close to 2 per cent respectively. Despite the decline, the STI maintained its position as one of the best performing indices globally in 2022.

Similarly, the iEdge S-Reit Index is also one of the most resilient Reit benchmarks this year, outperforming the FTSE EPRA Nareit Developed Index which declined more than 8 per cent in the 2022 YTD till Feb 24. 
S-REITs with positive total returns during this period include Suntec REIT (8.9 per cent), Sabana Industrial REIT (5.9 per cent), CapitaLand Integrated Commercial Trust (3.6 per cent), Far East Hospitality Trust (1.7 per cent), Keppel REIT (1.7 per cent), Ascott Residence Trust (1.7 per cent), First REIT (0.5 per cent) and ARA US Hospitality Trust (0.4 per cent), while Sasseur REIT and Daiwa House Logistics Trust returned flat for the period. 
Retail investors continued to drive fund flow activities in the S-Reits and property trusts sector, accumulating net retail inflows of S$350 million in the 2022 YTD till Feb 24, while institutional investors have seen net outflows of S$250 million for the sector.

However, during Thursday's session, the S-Reits sector garnered more than S$30 million of net inflows from institutional investors. 
S-REITs which saw the most net institutional inflows during this session include – CapitaLand Integrated Commercial Trust (+S$14 million), Ascendas REIT (+S$6 million), Suntec REIT (+S$5 million), Mapletree Industrial Trust (+S$4 million) and Mapletree North Asia Commercial Trust (+S$3 million). 
The S-Reits' earnings season is largely complete, with optimistic outlook and improving distribution per unit (DPU) a common theme.

CapitaLand Integrated Commercial Trust posted distributable income of S$675 million for the full year FY21, an increase of more than 80 per cent from FY20's distributable income of S$369 million. The trust remains optimistic about its outlook for 2022, noting that its portfolio valuation as at end-2021 improved 3.5 per cent year on year, signifying an improving outlook for Singapore's retail and office market.

Suntec Reit reported its full year FY21 results last month and announced a DPU of 8.666 cents, which was 17 per cent higher than its FY20 DPU. The increase in DPU was a result of higher distribution income, driven by contributions from the 2 newly acquired assets in London and higher income from Suntec City Mall.

The Reit noted that the recovery of retail business at Suntec City Mall has been encouraging with December 2021 tenant sales exceeding that of December 2019.

ARA US Hospitality Trust, which reported its full year FY21 results last week, posted distributable income of US$2.0 million. This follows from reporting no distributable income in FY20.

The trust saw continued strong recovery in the US hospitality industry in H2 2021, riding on the success of a widespread vaccination programme and the reopening of the markets across the country.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a><a href="https://www.businesstimes.com.sg/companies-markets/s-reits-remain-optimistic-about-2022-growth-0">read</a><a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a>the original version.

 
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    SREITs


The Straits Times Index (STI) gained more than 5 per cent in the 2022 year to date (YTD) till Feb 24, while the iEdge S-Reit Index declined close to 4 per cent during the same period amid expectations of rate hikes.

During last week's Thursday (Feb 24) session after Russia's announcement of a military operation in Ukraine, the STI and iEdge S-Reit Index dipped more than 3 per cent and close to 2 per cent respectively. Despite the decline, the STI maintained its position as one of the best performing indices globally in 2022.

Similarly, the iEdge S-Reit Index is also one of the most resilient Reit benchmarks this year, outperforming the FTSE EPRA Nareit Developed Index which declined more than 8 per cent in the 2022 YTD till Feb 24.  
S-REITs with positive total returns during this period include Suntec REIT (8.9 per cent), Sabana Industrial REIT (5.9 per cent), CapitaLand Integrated Commercial Trust (3.6 per cent), Far East Hospitality Trust (1.7 per cent), Keppel REIT (1.7 per cent), Ascott Residence Trust (1.7 per cent), First REIT (0.5 per cent) and ARA US Hospitality Trust (0.4 per cent), while Sasseur REIT and Daiwa House Logistics Trust returned flat for the period.  
Retail investors continued to drive fund flow activities in the S-Reits and property trusts sector, accumulating net retail inflows of S$350 million in the 2022 YTD till Feb 24, while institutional investors have seen net outflows of S$250 million for the sector.

However, during Thursday's session, the S-Reits sector garnered more than S$30 million of net inflows from institutional investors.  
S-REITs which saw the most net institutional inflows during this session include – CapitaLand Integrated Commercial Trust (+S$14 million), Ascendas REIT (+S$6 million), Suntec REIT (+S$5 million), Mapletree Industrial Trust (+S$4 million) and Mapletree North Asia Commercial Trust (+S$3 million).  
The S-Reits' earnings season is largely complete, with optimistic outlook and improving distribution per unit (DPU) a common theme.

CapitaLand Integrated Commercial Trust posted distributable income of S$675 million for the full year FY21, an increase of more than 80 per cent from FY20's distributable income of S$369 million. The trust remains optimistic about its outlook for 2022, noting that its portfolio valuation as at end-2021 improved 3.5 per cent year on year, signifying an improving outlook for Singapore's retail and office market.

Suntec Reit reported its full year FY21 results last month and announced a DPU of 8.666 cents, which was 17 per cent higher than its FY20 DPU. The increase in DPU was a result of higher distribution income, driven by contributions from the 2 newly acquired assets in London and higher income from Suntec City Mall.

The Reit noted that the recovery of retail business at Suntec City Mall has been encouraging with December 2021 tenant sales exceeding that of December 2019.

ARA US Hospitality Trust, which reported its full year FY21 results last week, posted distributable income of US$2.0 million. This follows from reporting no distributable income in FY20.

The trust saw continued strong recovery in the US hospitality industry in H2 2021, riding on the success of a widespread vaccination programme and the reopening of the markets across the country.   REIT Watch is a weekly column on The Business Times, read the original version.

 



REIT Watch - S-Reits remain optimistic about 2022 growth

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<html><body>Singapore continues to lead the Asia ex-Japan region as the largest REIT exchange traded fund (ETF) market following the listing of CSOP iEdge S-REIT Leaders ETF and the UOB APAC Green REIT ETF on the Singapore Exchange last year. 
Together with the two new listings, the 5 Singapore-listed Reit ETFs now have combined assets under management (AUM) of close to S$800 million, which has more than doubled since January 2020. 
The 2 ETFs with 100 per cent focus on S-REITs – Lion-Phillip S-REIT ETF and CSOP iEdge S-REIT Leaders ETF – recorded a combined AUM of S$353 million while the other three ETFs which offer Asia and Asia Pacific exposure – NikkoAM-StraitsTrading Asia Ex Japan REIT ETF, Phillip SGX APAC Dividend Leaders REIT ETF and UOB Asia Pacific (APAC) Green REIT ETF – recorded S$437 million of combined AUM. 
Retail investors, which net bought (note that net buy/sell amount is derived by subtracting total sell amount from total buy amount) over S$1 billion of S-Reits in 2021, have been a key driver of the overall S-Reits sector fund flow activities. 
Since the start of 2022, retail investors continue to net buy S-Reits, accumulating more than S$350 million in net retail inflows in the year to date. 
Similarly, the 5 Reit ETFs have seen 24 consecutive months of net buys by retail investors. 
In January 2022, retail investors net bought S$15 million of Reit ETFs from the secondary market, the largest amount seen over the last 24 months. 
Retail investors are active holders of Reit ETFs and are holding 43 per cent of the combined AUM across the 5 Reit ETFs (as of Jan 2022). 
Aside from direct cash investments, retail investors may also invest in Singapore-listed Reit ETFs via the Supplementary Retirement Scheme (SRS) and the CPF investment scheme (CPFIS). The NikkoAM-StraitsTrading Asia ex Japan Reit ETF was included under CPFIS in November 2021. 
In terms of sector performance, the FTSE ST Reit Index declined close to 2 per cent in the 2022 year to date till Feb 10, amid increasing expectations of a potential rate hike. 
The index yield spread (difference between risk-free rate and FTSE ST Reit Index's dividend yield) stands at 402bps, which is close to the average yield spread over the last 10 years. 
While interest rates gyration may potentially narrow the yield spread, fundamental factors such as macro-economic recovery and reopening may also have a positive impact on dividend yields. 
The 5 best performing Reits in the 2022 year to date include - Suntec Reit (+6.8 per cent), Sabana Industrial Reit (+4.8 per cent), Ascott Residence Trust (+4.6 per cent), Keppel Reit (+4.4 per cent) and CDL Hospitality Trusts (+4.3 per cent). REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/retail-interest-picks-up-in-s-reit-etfs"> read </a>the original version.</body></html>


      
    
    Buy sell activities 

Singapore continues to lead the Asia ex-Japan region as the largest REIT exchange traded fund (ETF) market following the listing of CSOP iEdge S-REIT Leaders ETF and the UOB APAC Green REIT ETF on the Singapore Exchange last year.  
Together with the two new listings, the 5 Singapore-listed Reit ETFs now have combined assets under management (AUM) of close to S$800 million, which has more than doubled since January 2020.  
The 2 ETFs with 100 per cent focus on S-REITs – Lion-Phillip S-REIT ETF and CSOP iEdge S-REIT Leaders ETF – recorded a combined AUM of S$353 million while the other three ETFs which offer Asia and Asia Pacific exposure – NikkoAM-StraitsTrading Asia Ex Japan REIT ETF, Phillip SGX APAC Dividend Leaders REIT ETF and UOB Asia Pacific (APAC) Green REIT ETF – recorded S$437 million of combined AUM.  
Retail investors, which net bought (note that net buy/sell amount is derived by subtracting total sell amount from total buy amount) over S$1 billion of S-Reits in 2021, have been a key driver of the overall S-Reits sector fund flow activities.  
Since the start of 2022, retail investors continue to net buy S-Reits, accumulating more than S$350 million in net retail inflows in the year to date.  
Similarly, the 5 Reit ETFs have seen 24 consecutive months of net buys by retail investors.  
In January 2022, retail investors net bought S$15 million of Reit ETFs from the secondary market, the largest amount seen over the last 24 months.  
Retail investors are active holders of Reit ETFs and are holding 43 per cent of the combined AUM across the 5 Reit ETFs (as of Jan 2022).  
Aside from direct cash investments, retail investors may also invest in Singapore-listed Reit ETFs via the Supplementary Retirement Scheme (SRS) and the CPF investment scheme (CPFIS). The NikkoAM-StraitsTrading Asia ex Japan Reit ETF was included under CPFIS in November 2021.  
In terms of sector performance, the FTSE ST Reit Index declined close to 2 per cent in the 2022 year to date till Feb 10, amid increasing expectations of a potential rate hike.  
The index yield spread (difference between risk-free rate and FTSE ST Reit Index's dividend yield) stands at 402bps, which is close to the average yield spread over the last 10 years.  
While interest rates gyration may potentially narrow the yield spread, fundamental factors such as macro-economic recovery and reopening may also have a positive impact on dividend yields.  
The 5 best performing Reits in the 2022 year to date include - Suntec Reit (+6.8 per cent), Sabana Industrial Reit (+4.8 per cent), Ascott Residence Trust (+4.6 per cent), Keppel Reit (+4.4 per cent) and CDL Hospitality Trusts (+4.3 per cent).  REIT Watch is a weekly column on The Business Times, read the original version.


REIT Watch - Retail interest picks up in S-Reit ETFs

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SPH REIT kicked off the current financial reporting season for S-REITs on 7 Jan 2022 with the release of its first quarter (ended 30 Nov 2021) business update. This was followed by Sabana Industrial Trust, which reported its second half and full year (ended 31 Dec 2021) financial results on 20 Jan 2022. 
Another 25 S-Reits have also confirmed that they will unveil results or business updates between Jan 24 and Feb 23 for their respective period ended Dec 31, 2021. Among them, 16 S-Reits would be reporting full-year financial results, 4 would be reporting first-half or third-quarter financial results, and another 5 would be providing quarterly business updates.

SPH Reit, in its Q1 FY2022 business update, reiterated its strategy to remain focused on maintaining high occupancy and generating sustainable cash flow while working in partnership with tenants. The Reit's portfolio occupancy rates maintained at 98.8 per cent for the quarter while portfolio weighted average lease expiry (WALE) improved to 5.5 years by net lettable area (NLA) and 2.9 years by gross rental income (GRI) from FY2021's WALE of 5.4 years by NLA and 2.7 years by GRI. 
The Reit remains cautiously optimistic despite the developments surrounding the Omicron variant. It noted resilient tenants' sales in Q1 FY2022 for its Singapore portfolio despite restrictions on dining-in. Occupancy rates for its Singapore portfolio also improved to 99.8 per cent from 98.9 per cent in Q4 FY2021, in line with its strategy of maintaining high occupancy and stabilised cashflow.

Sabana Industrial Reit (Sabana) reported a 14.4 per cent year-on-year increase in gross revenue for H2 FY2021, mainly due to higher occupancy rates from several properties across the portfolio. Net property income (NPI) also rose 10.4 per cent year on year on the higher revenue.

For the full year, the Reit's revenue and NPI increased 14.2 per cent and 16.4 per cent year on year respectively, compared to FY2020. This translated to a full year distribution per unit (DPU) of 3.05 cents, a 10.5 per cent year-on-year increase. 
The Reit manager noted that its focus on attracting tenants in expansionary sectors has led to the continued onboarding of companies from the electronics, healthcare, data centre, and logistics sectors in FY2021. Sabana's overall occupancy rate as at Dec 31, 2021 was 85.4 per cent, up from 76.5 per cent as at Dec 31, 2020 and the highest since 2018. During the year, Sabana announced the removal of its syariah compliance requirement to provide the Reit with access to more diversified funding sources and to enable it to appeal to a wider pool of tenants for its next phase of growth.  REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/full-steam-ahead-for-s-reits-earnings-season">read </a>the original version.
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    Schedule of expected S-Reits earnings or business updates


SPH REIT kicked off the current financial reporting season for S-REITs on 7 Jan 2022 with the release of its first quarter (ended 30 Nov 2021) business update. This was followed by Sabana Industrial Trust, which reported its second half and full year (ended 31 Dec 2021) financial results on 20 Jan 2022.  
Another 25 S-Reits have also confirmed that they will unveil results or business updates between Jan 24 and Feb 23 for their respective period ended Dec 31, 2021. Among them, 16 S-Reits would be reporting full-year financial results, 4 would be reporting first-half or third-quarter financial results, and another 5 would be providing quarterly business updates.

SPH Reit, in its Q1 FY2022 business update, reiterated its strategy to remain focused on maintaining high occupancy and generating sustainable cash flow while working in partnership with tenants. The Reit's portfolio occupancy rates maintained at 98.8 per cent for the quarter while portfolio weighted average lease expiry (WALE) improved to 5.5 years by net lettable area (NLA) and 2.9 years by gross rental income (GRI) from FY2021's WALE of 5.4 years by NLA and 2.7 years by GRI.  
The Reit remains cautiously optimistic despite the developments surrounding the Omicron variant. It noted resilient tenants' sales in Q1 FY2022 for its Singapore portfolio despite restrictions on dining-in. Occupancy rates for its Singapore portfolio also improved to 99.8 per cent from 98.9 per cent in Q4 FY2021, in line with its strategy of maintaining high occupancy and stabilised cashflow.

Sabana Industrial Reit (Sabana) reported a 14.4 per cent year-on-year increase in gross revenue for H2 FY2021, mainly due to higher occupancy rates from several properties across the portfolio. Net property income (NPI) also rose 10.4 per cent year on year on the higher revenue.

For the full year, the Reit's revenue and NPI increased 14.2 per cent and 16.4 per cent year on year respectively, compared to FY2020. This translated to a full year distribution per unit (DPU) of 3.05 cents, a 10.5 per cent year-on-year increase.  
The Reit manager noted that its focus on attracting tenants in expansionary sectors has led to the continued onboarding of companies from the electronics, healthcare, data centre, and logistics sectors in FY2021. Sabana's overall occupancy rate as at Dec 31, 2021 was 85.4 per cent, up from 76.5 per cent as at Dec 31, 2020 and the highest since 2018. During the year, Sabana announced the removal of its syariah compliance requirement to provide the Reit with access to more diversified funding sources and to enable it to appeal to a wider pool of tenants for its next phase of growth.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Full steam ahead for S-Reits' earnings season

Singapore

Alpha Integrated Real Estate Investment Trust is a Singapore-listed real estate investment trust focused on high-quality industrial assets, including high-tech industrial, chemical warehouse & logistics, warehouse & logistics, and general industrial properties. It holds a diversified portfolio of 18 properties in Singapore. The company was founded in 2010 and is headquartered in Singapore.

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