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Singapore REITs share price review: Ascendas, Mapletree, CapitaLand, Keppel

We review the stock performance of the five hardest hit Singapore real estate investment trusts during this coronavirus pandemic.

Source: Bloomberg

Singapore real estate investment trusts (REITs) are among some of the most popular stocks on the Singapore Exchange (SGX), thanks to their attractive dividend yields and reasonable buy-ins.

The top ten REITS have a combined market capitalisation of over S$60 billion.

They have historically been popular among investors because of their steady growth rates and outlook, as well as low entry price points. In the last two weeks, however, these trusts have been affected by global sell-off sentiments triggered by global government coronavirus response fiscal policies.

In this article, we examine five of the hardest hit REITs since 05 March, two days after the US Federal Reserve announced its first round of interest rate cuts – an event which had major repercussions for stock markets everywhere.

Read also: Top 9 billion-dollar SGX stocks to buy

1. Ascendas REIT: ↓27.24%

Share price of Ascendas REIT (A-REIT), the largest industrial real estate investment trust listed in Singapore, continues its steep downward trajectory, with seemingly no end in sight at present.

As at 1pm SGT on 19 March, the trust’s stock value has fallen to a 14-month low of S$2.51 per share.

Since 05 March – the same time that the coronavirus outbreak began to pick up steam in Europe and North America – Ascendas’ share price has plummeted a hefty 27.24%.

As prices continue to fall, UOB analysts have rated the stock a ‘buy’ alongside a 12-month share price target of S$3.35. They noted that A-REIT does not have any exposure to the China market, with Singapore properties accounting for 72% of its portfolio valuation.

A-REIT’s portfolio comprises of 102 properties in Singapore, 26 properties in Australia and two business park properties in China, with a total asset base of about S$8.3 billion.

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2. Mapletree Commercial Trust: ↓24.8%

Although Mapletree Commercial Trust's decline is not quite as steep as the others on this list, it still suffered a significant loss, with nearly a quarter of its market valuation erased since the start of March.

Trading at S$1.74 per share, this is the REIT’s lowest price level since February 2019.

Still, analysts are optimistic about the trust’s business outlook for the next two years due to the Singapore government’s residential and commercial expansion plans for the Greater Southern Waterfront (GSW) region. With over 90% of Mapletree Commercial Trust’s portfolio valuation situated in GSW, the REIT’s revenue is expected to benefit from the increased human traffic.

UOB’s research team on 10 March upgraded their rating for Mapletree Commercial Trust to a ‘buy’, while raising share price target to S$2.62 per share (from $2.38 previously).

3. Mapletree Industrial Trust: ↓35.4%

The Industrial REIT arm of the Singapore property giant Mapletree has taken the largest beating out of all the real estate investment trusts on the list.

Share price has collapsed 35.4% to a 14-month low of S$1.95 as at 3pm SGT on 19 March. Shares of Mapletree Industrial Trust were trading at over S$3.00 only two weeks ago.

In light of the price rout, DBS and UOB analysts have rated the stock a ‘buy’ alongside 12-month price targets of S$3.00 per share and S$2.90 a share respectively.

While the coronavirus’ impacts will linger, the analysts do not see things becoming worse than during 2008’s Global Financial Crisis.

In fact, they see opportunities for industrial trusts in Singapore, with supply chains in China now disrupted by the coronavirus. Resumption of supply chains will take some time, so manufacturers could choose to ramp up production at alternative facilities in Southeast Asia.

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4. CapitaLand Mall Trust: ↓32.8%

CapitaLand Integrated Commercial Trust gave birth to the category of REITs in 2002 when it became the first trust to be listed on the SGX.

Since 05 March, its share price has fallen a massive 32.8%. As at 3.15pm SGT on 19 March, CapitaMall Trust is trading at S$1.72 per share.

This is the REIT’s lowest share price since May 2012.

UOB analysts have rated the stock a ‘buy’ alongside a 12-month target price of S$2.88 per share, considering certain factors.

They anticipate that the proposed merger between CapitaMall Trust and CapitaLand Commercial Trust – still subject to regulatory approval – will help to boost the Mall division’s distribution per unit by 1.6% and net asset value by 1.6%

Furthermore, they noted that the Mall Trust provides an ‘attractive’ annual dividend yield of 7%.

5. Keppel DC REIT: ↓31.2%

Keppel DC REIT, which holds a portfolio of data centre assets across Asia Pacific and Europe, has seen share price crash by over 31% in the last two weeks.

Keppel’s second largest trust – the first being the Keppel REIT – is currently trading around S$1.79 per share – a six-month low.

CIMB analysts on 19 March upgraded their rating on Keppel DC REIT to an ‘add’ and a flat 12-month target price of S$2.17 per share.

They stated in a report that the lower price gives investors an opportunity to invest in the only pure data centre REIT in Singapore, adding that a solid business model and any accretive acquisitions made by the trust will boost distribution per unit growth and valuation.

‘While it is the most expensive Singapore REIT under our coverage, we think this is justifiable given its pure exposure to data centres,’ the analysts wrote.

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