WHILE the iEdge S-Reit Index (benchmark for the S-Reits cluster) returned flat in the year to date, the top 10 performing S-Reits within the benchmark averaged 11.1 per cent total returns. Of these, four were industrial Reits – AIMS Apac Reit (11.2 per cent in total returns), Mapletree Logistics Trust (9.3 per cent), Mapletree Industrial Trust (7.7 per cent), and CapitaLand Ascendas Reit (7.3 per cent).

The four industrial Reits averaged 9 per cent in total returns in the year to date and recorded combined net institutional fund inflows of S$18.9 million. These four industrial Reits, along with ESR-Logos Reit, were also among the top 10 Reits that recorded institutional net inflows in August.

According to the September SGX S-Reits & Property Trusts Chartbook, industrial Reits led August’s net institutional fund flows with S$78 million in combined inflows. In industrial production, Singapore’s factory output fell 0.9 per cent year on year (yoy) in July, contracting at a slower rate than in the month before, as key electronics segment returned to growth.

July’s industrial production data marked the 10th consecutive month of contraction, but was better than the 3.8 per cent contraction that private-sector economists were expecting according to a Bloomberg poll. Analysts indicated that the better-than-expected print signals that a gradual recovery in manufacturing activity is on the cards in the latter half of this year.

AIMS Apac Reit (AAReit) reported that distributions to unitholders for Q1 FY24 grew 5.1 per cent yoy to S$17.2 million. Despite challenging headwinds, AAReit continues to see sustained demand for high-quality assets from advanced manufacturing and logistics sectors.

AAReit’s portfolio occupancy increased to 98.1 per cent, attributable to the industrial and logistics and warehouse segments. Renewed leases during the quarter achieved positive rental reversion of 38 per cent largely due to strong demand from third-party logistics providers.

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Mapletree Logistics Trust (MLT) reported that amount distributable to unitholders for Q1 FY23/24 rose 3.1 per cent yoy to S$112 million, including a higher divestment gain and capital gain tax write-back. During the quarter, MLT completed acquisitions of eight properties in Japan, South Korea and Australia, bringing the total number of assets in its portfolio to 193.

MLT maintained a portfolio occupancy rate of 97.1 per cent, up slightly quarter on quarter (qoq). MLT achieved positive rental reversions of approximately 4.2 per cent, led by Singapore, Japan and Vietnam.

Mapletree Industrial Trust (MIT) reported 3.1 per cent higher distribution to unitholders qoq, but 2.5 per cent lower on a year-on-year basis as higher net property income was offset by higher borrowing costs. MIT achieved positive rental revisions for renewal leases across most property segments in Singapore.

In May, MIT announced the acquisition of a newly built data centre in Osaka, Japan, which will offer a strategic opportunity for MIT to diversify its data centre presence in Japan. With newly acquired properties in Singapore in H1 2023 and the US in FY22, CapitaLand Ascendas Reit’s (Clar) gross revenue for H1 2023 rose 7.7 per cent but total amount available for distribution declined by 1 per cent, mainly due to higher interest expense.

Clar maintained a portfolio occupancy of 94.4 per cent and achieved rental reversion of 18 per cent for leases renewed during Q2 2023, led by the Singapore logistics segment which saw 39.1 per cent reversion amid a tight supply. SGX RESEARCH

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly SReits & Property Trusts Chartbook.

Source: SGX Research S-Reits & Property Trusts Chartbook.