Heavy trading in new S-Reit inclusions in global Reit benchmark

ON Sept 1, FTSE Russell announced that 11 SGX-listed Reits & Property Trusts, with market capitalisation ranging from S$2.6 billion to S$1.1 billion, entered the FTSE EPRA Nareit Global Developed Index after its quarterly index review.

This followed from a change in index rules announced in June 2021, which lowered the inclusion market cap threshold for the Developed Asia series from 0.3 to 0.1 per cent.

A total of 24 Reits were added into the FTSE EPRA Nareit Global Developed Index following the review, including seven from Australia, two from Hong Kong, three from Japan, one from New Zealand and 11 from Singapore.

The FTSE EPRA Nareit Global Real Estate Index Series, designed to represent general trends in eligible real estate equities worldwide, is a widely followed global benchmark with an estimated US$340 billion of assets under management actively benchmarked or passively tracking the indices.

As of June 2021, there were 23 SGX-listed real estate related equities in the index series, which included 19 S-Reits.

The recent index review will bring the total number of SGX-listed Reits in the index series to 30, with a combined market capitalisation of S$108 billion.

After the announcement, the 11 new inclusions saw a boost in trading activities on Sept 2, with a 353 per cent increase in traded value compared to their 12-month total average daily traded value (ADTV).

The three S-Reits which saw the biggest increase in ADTV on Sept 2 were ARA Logos Logistics Trust K2LU (+541 per cent), Starhill Global Reit P40U (+431 per cent) and SPH Reit SK6U (+426 per cent), while the three S-Reits which saw the largest price jumps on Sept 2 were ESR-Reit J91U (+8.5 per cent), ARA Logos Logistics Trust (+6.1 per cent) and OUE Commercial Reit TS0U (+6.1 per cent).

ARA Logos Logistics Trust (ALOG), with year-to-date total returns of 65.5 per cent, is among the best performing S-Reit this year.

Karen Lee, chief executive officer of ARA Logos Logistics Trust's (ALOG) manager, commented that ALOG's entry into the index will not only enhance ALOG's trading liquidity and extend its institutional investor reach but will also further strengthen ALOG's growth story.

Similarly, Adrian Chui, chief executive officer and executive director of ESR-Reit's manager, noted that the inclusion in the index will enhance the Reit's trading liquidity and visibility to investors worldwide, solidifying its position among listed industrial Reits in Singapore and providing access to wider pools of capital as ESR-Reit executes organic and acquisition strategies. SGX RESEARCH

• For more research and information on Singapore's Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
• Source: SGX Research S-Reits & Property Trusts Chartbook