Retail and institutions net buy industrial and retail S-Reits in August

RETAIL investors were net buyers of S-Reits in August, with net fund flows exceeding S$187 million, while institutional investors net sold the sector, paying S$94 million.

Some of the top net buy sectors by retail investors were diversified Reits (+S$104.8 million), hospitality Reits (+S$40.6 million), and industrial Reits (+S$22.0 million).

On the other hand, industrial Reits (+S$55.4 million) and retail Reits (+S$4.3 million) were the only two net buy sectors by institutional investors.

Industrial Reits and retail Reits were also two sectors that recorded inflows across retail and institutional investors.

Across the 40 actively traded S-Reits, CapitaLand Ascendas Reit (Clar), ESR-Logos Reit (E-Log) and Mapletree Logistics Trust (MLT) were the three S-Reits that saw inflows from both retail and institutional investors.

Clar’s H1 2023 net property income (NPI) grew 6.7 per cent year on year to S$508.8 million, supported by a 94.4 per cent portfolio occupancy, positive average rental reversion of 14.2 per cent for leases renewed during the period and contributions from acquisitions.

Clar’s Singapore logistics segment led growth with a 39.1 per cent reversion amid tight supply.

During H1 2023, its Singapore acquisitions that were completed included a high-tech industrial property at 622 Toa Payoh Lorong 1, a cold storage facility at 1 Buroh Lane, and The Shugart, a business park property at 26 Ayer Rajah Crescent.

E-Log recorded a 37.0 per cent year-on-year increase in NPI to S$140.8 million in H1 2023.

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E-Log’s portfolio reported a 11.6 per cent positive rental reversion and increased its occupancy to 92.9 per cent during the period, driven by the continued resilience and favourable demand/supply dynamics in the logistics sector.

E-Log executed its 4R strategy in H1 2023 with a S$300 million equity fundraising to recapitalise its balance sheet in February and announced the proposed divestment of seven non-core assets in June, with the two milestones expected to reduce its pro forma FY22 gearing to 33.6 per cent.

MLT’s NPI for Q1 FY2024 declined by 3.1 per cent year on year to S$158.1 million, largely due to weaker exchange rates against the Singapore dollar, but the decline was mitigated by better performance in Singapore and contribution from recent acquisitions in Japan and South Korea.

MLT maintained a high portfolio occupancy rate of 97.1 per cent and its portfolio achieved positive rental reversions of approximately 4.2 per cent, led by Singapore, Japan and Vietnam. 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 S-Reits & Property Trusts Chartbook.

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