Introduction
This detailed equity research report explores the performance, updates, and outlook of Singapore REITs (S-REITs) and Business Trusts. Covering weekly trends, sector performances, and deep-dives into individual companies, this analysis provides valuable insights for investors. Below is a comprehensive summary of the findings and recommendations for each company covered in the report.
In-depth Analysis of Listed Companies
CapitaLand Ascendas REIT (CLAR)
CLAR reported a 3.2% year-on-year (YoY) increase in 2H24 DPU to 7.681 Singapore cents and a 0.3% rise in FY24 DPU to 15.205 Singapore cents. The FY24 DPU slightly exceeded expectations by 2.2%. The fair value (FV) estimate was adjusted downward from SGD3.32 to SGD3.30, reflecting a higher cost of equity assumption of 6.6%. The FY25 DPU forecast was raised by 1.7%.
Recommendation: BUY
Parkway Life REIT (PLIFE)
Parkway Life REIT saw a slight dip in 2H24 revenue (-0.3%) and net property income (NPI) (-1.1%) to SGD72.8m and SGD68.2m, respectively. The 2H24 DPU dropped by 1.3% YoY to 7.38 Singapore cents due to an enlarged unit base. However, FY24 DPU rose by 1% YoY to 14.92 Singapore cents, meeting 97.3% of projections. The FV estimate increased from SGD4.49 to SGD4.60 following a slight increase in the cost of equity assumption to 5.8%.
Recommendation: BUY
CapitaLand China Trust (CLCT)
CLCT’s 2H24 gross revenue and NPI declined by 5.5% and 6.7% YoY, respectively, due to a weaker Chinese Yuan (CNY). DPU for 2H24 and FY24 fell significantly by 12% and 16.2% YoY to 2.64 and 5.65 Singapore cents, missing the full-year forecast by 7.5%. The FV estimate was revised downward from SGD0.87 to SGD0.76, reflecting a higher cost of equity assumption of 8.7%.
Recommendation: BUY
CapitaLand Integrated Commercial Trust (CICT)
CICT recorded modest growth in 2H24 gross revenue (+1.2%) and NPI (+1.3%) to SGD794.4m and SGD571.1m, respectively. The FY24 DPU edged up by 1.2% YoY to 10.88 Singapore cents, achieving 99.3% of forecasts. The FV estimate decreased from SGD2.41 to SGD2.35 due to an increase in the risk-free rate assumption by 50 basis points.
Recommendation: BUY
Frasers Logistics & Commercial Trust (FLCT)
FLCT reported a strong 1QFY25 portfolio rental reversion of +37.4%. However, occupancy rates dipped slightly by 0.2 percentage points to 94.3%. The trust appears to prioritize growth opportunities over consistent DPU stability. As a result, the FY25 and FY26 DPU forecasts were lowered by 4.2% and 5.9%, respectively. The FV estimate was reduced from SGD1.28 to SGD1.14 due to a higher cost of equity assumption.
Recommendation: BUY
Keppel REIT
Keppel REIT saw stable performance with a forward DPU of 5.80 Singapore cents, providing an attractive forward yield of 6.9%. The trust maintains a healthy debt-to-asset (D/A) ratio of 41.2%, and its P/B ratio stands at 0.67x. It remains a solid choice for investors seeking office REIT exposure.
Recommendation: BUY
Mapletree Pan Asia Commercial Trust (MPACT)
MPACT performed steadily with a forward DPU of 8.30 Singapore cents, offering a forward yield of 6.9%. Its diversified portfolio spans Singapore, Hong Kong, and China, providing stability and growth potential. The D/A ratio is 38.2%, with a P/B ratio of 0.69x.
Recommendation: BUY
Mapletree Industrial Trust (MINT)
MINT delivered consistent returns with a forward DPU of 13.70 Singapore cents, translating into a forward yield of 6.4%. Despite a slight YoY decline of 2.1%, MINT remains a reliable REIT for industrial property exposure. The D/A ratio is 39.8%, and the P/B ratio is 1.22x.
Recommendation: BUY
Parkway Life REIT (PLife)
PLife continues to be a robust player in the healthcare REIT sector, with a forward DPU of 17.80 Singapore cents and a forward yield of 4.5%. Its portfolio is diversified across Singapore and other Asian markets. Despite its higher valuation at a P/B ratio of 1.65x, PLife remains a key recommendation.
Recommendation: BUY
