S-Reits with healthcare and China assets outshine in November

GLOBAL Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron variant.

Similarly, the 3 sessions saw the iEdge S-Reit Index shave off 3.8 per cent in total returns, ending November with a 2.4 per cent decline.

The top 5 performers over the month of November were firstly, S-Reits with healthcare assets - First Reit AW9U (12.2 per cent in total returns) and ParkwayLife Reit C2PU (6.6 per cent) - and secondly, S-Reits with assets located in China - Sasseur Reit CRPU (4.7 per cent), EC World Reit BWCU (3.1 per cent) and BHG Retail Reit BMGU : BMGU 0% (2.9 per cent).

As uncertainty over the Omicron variant eased gradually, the iEdge S-Reit Index regained 1.2 per cent over the first 7 sessions of December, bringing its total returns since the start of November to a decline of 1.2 per cent.

S-Reits with healthcare and China-based assets continued to be the top performers over the extended period from the start of November to Dec 9, 2021.

These S-Reits were: First Reit (18.0 per cent in total returns), BHG Retail Reit (15.4 per cent), ParkwayLife Reit (8.9 per cent), Sasseur Reit (4.7 per cent) and Mapletree North Asia Commercial Trust RW0U : RW0U 0% (4.5 per cent).

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

First Reit, in its third quarter business update ended Sep 30, 2021, noted that it continued to see performance stabilising, following the restructuring of the master lease agreements for 14 Indonesia hospitals in January 2021 and its recapitalisation efforts in Q12021.

Last week, the trust also unveiled its 2.0 Growth Strategy, which includes diversifying into developed markets, strengthening of capital structure, reshaping of portfolio for capital-efficient growth as well as a pivoting to ride megatrends like ESG (environmental, social and governance).

In line with its 2.0 Growth Strategy, First Reit announced the proposed acquisition of 12 nursing homes in Japan from its sponsor, OUE Lippo Healthcare 5WA : 5WA 0% for 24.2 billion yen.

Post-acquisition, First Reit will increase its exposure to developed markets, from 3.6 per cent of its asset value as at H12021, to 27.1 per cent on a pro forma basis.

Sasseur Reit declared distribution per unit (DPU) of 1.831 Singapore cents for Q32021, an increase of 13.4 per cent year on year.

The Reit manager noted that despite strict government regulations, the Reit's outlet sales grew 12.0 per cent quarter on quarter to 996.6 million yuan.

For the 9-month period ended Sep 30, 2021, Sasseur Reit's four outlets registered total sales of 3.02 billion yuan, representing an increase of 21.8 per cent compared to a year ago.

Similarly, EC World Reit announced higher DPU of 1.662 Singapore cents for Q32021, an increase of 19.7 per cent year on year.

Four out of EC World Reit's portfolio of 8 properties cater to the e-commerce logistics sector. The occupancy rate of its Wuhan Meiluote property increased from 79.4 per cent to 84.5 per cent, as it secured a 3-month lease starting Oct 1, 2021, in anticipation of the annual Singles Day sales.

As at Oct 31, 2021, EC World Reit's portfolio occupancy is 99.2 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.