REITs Sector Update for Singapore

REITs Sector Update for Singapore:

1. Performance Overview:
   • The FTSE ST All-share REITs Index (FSTREI) gained 13% in Q3 2024, outperforming the STI, which increased by 8.8%.
   • Top REIT picks such as Frasers Logistics & Commercial Trust (FLT), Keppel REIT (KREIT), Mapletree Industrial Trust (MINT), and Mapletree Pan Asia Commercial Trust (MPACT) outperformed the FSTREI.
2. Laggards:
   • The report suggests focusing on REITs that underperformed in Q3 but have strong fundamentals. These laggards include CDL Hospitality Trust (CDREIT), Far East Hospitality Trust (FEHT), Digital Core REIT (DCREIT), Paragon REIT (PGNREIT), and Sasseur REIT (SASSR).
   • Despite their lagging performance, they are recommended for investment due to their solid fundamentals.
3. Hospitality REITs:
   • CDL Hospitality Trusts (CDREIT): Reported strong RevPAR growth across Singapore, Australia, Japan, and Germany in 1H24. The target price is set at S$1.48.
   • Far East Hospitality Trust (FEHT): Occupancy rose to 80.4%, and there is ample debt headroom for acquisitions. The target price is S$0.77.
4. Data Centre REITs:
   • Digital Core REIT (DCREIT): The report highlights that DCREIT’s acquisition of additional interest in a Frankfurt data center offers DPU accretion potential, with a target price of US$0.88.
5. Retail REITs:
   • Paragon REIT (PGNREIT) has a 100% occupancy rate for its Singapore assets and plans to divest The Rail Mall to pare down debt.
   • Sasseur REIT (SASSR) benefits from consumers switching to domestic brands due to consumption downgrades, with a target price of S$0.98.
6. Recommendations:
   • Investors are encouraged to switch to these laggards for better returns as their fundamentals remain strong despite recent underperformance.Thank you