Third quarter wrap sees institutional investors return to S-Reits

THE iEdge S-Reit Index ended the third quarter of 2021 relatively flat with 0.2 per cent total returns, in line with global Reit markets which declined towards the later half of the quarter due to steepening of yield curves. This brings the index year-to-date total returns to 4.5 per cent.

There are 20 trusts which outperformed the index in Q3 2021, including 10 of the 11 trusts that entered the FTSE EPRA Nareit Global Developed Index following the most recent September review. The top five performing trusts, which were all recent index inclusions, were: OUE Commercial Reit TS0U (14.2 per cent), Starhill Global Reit P40U (12.4 per cent), ARA Logos Logistics Trust K2LU (10.1 per cent), Far East Hospitality Trust Q5T (9.9 per cent), and ESR-Reit J91U (9.3 per cent). These five trusts received net institutional inflows of S$192 million and net retail outflows of S$89 million this quarter.

In the year to date, the five best performing trusts where: ARA Logos Logistics Trust (60.2 per cent), Sabana Reit M1GU (34.3 per cent), Starhill Global Reit (32.6 per cent), Keppel Pacific Oak US Reit CMOU (28.4 per cent) and First Reit AW9U (27.8 per cent). These five trusts received net institutional inflows of S$132 million and net retail outflows of S$66 million in the year to date.

Overall, institutional investors were net buyers of the S-Reits and property trusts sector in the third quarter, after being net sellers in the first half of 2021.

The sector received three consecutive months of net institutional inflows from July to September 2021, amounting to S$270 million.

Retail investors continue to be net buyers of the sector since the start of the year, with the exception of July, which saw net retail outflows of S$95 million. In the year to date, retail investors net buying activities in the sector totalled S$917 million.

There are four trusts that received net inflows from both institutional and retail investors in the year to date: Frasers Logistics & Commercial Trust BUOU (institutional: S$16.4 million; retail: S$8.5 million) , Far East Hospitality Trust (institutional: S$8.2 million; retail: S$1.7 million), Keppel Pacific Oak US Reit (institutional: S$5.5 million; retail: S$9.7 million) and Prime US Reit OXMU (institutional: S$0.5 million; retail: S$12.8 million).

The top three performing sub-sectors for the Q3 2021 period are industrial Reits (3.3 per cent total returns), specialised Reits (2.9 per cent), and diversified Reits (2.0 per cent).

The top three performing sub-sectors in the year-to-date are healthcare Reits (25.4 per cent total returns), industrial Reits (21.0 per cent), and office Reits (11.8 per cent). 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.