S-REITs' returns dipped 1.8% in 2018 YTD

This has brought their average total return to 9.1% in a year.

In the 2018 year through to 17 May, 34 S-REITs governed by the Collective Investment Scheme (CIS) and six Stapled Trusts which are governed by both the CIS and the Business Trust Act averaged a 1.8% decline in total return, Singapore Exchange (SGX) Research revealed.

According to its market update, this has brought their average 12-month total return to 9.1%. Together, the 40 trusts maintain an average indicative dividend yield of 6.6%.

The best performer over the period, Sabana Shariah Comp Industrial REIT has seen its unit price gain 13.2% from its 12 February close. It was followed by Cromwell European REIT, BHG Retail REIT, Manulife US REIT, and IREIT Global.

Three new REITs (Sasseur REIT, Cromwell European REIT and Keppel-KBS US REIT) have added $3.1b to the combined market capitalisation of $85.8b. Moreover, the market value of the S-REIT sector has expanded more than 200% over the past 10 years.

SGX market strategist Geoff Howie noted that since global markets stabilised in the third quarter of 2009, the FTSE ST REIT Index has on average maintained a month-end yield of 6.3%, which is 4.1% higher than the month-end average of the MAS 10 year Government Bond Yield at 2.2%.

He added that the difference between the two yields has narrowed to 3.3% at present, predominately due to higher bond yields.

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