Top 10 Singapore REITs that made you money if you invested from their IPOs (updated 2018)

In early 2017, Sabana REIT has been getting a lot of attention when a small group of unitholders moved to kick out the manager for delivering poor performance since its IPO in 2010. Early investors who bought Sabana at an IPO price of S$1.05 are now sitting on huge losses – Sabana last traded at just 43 cents per share.

If we look at the history, Sabana REIT isn’t alone. There are several other Singapore REITs (S-REITs) like Saizen REIT, MacarthurCook Industrial REIT and Allco REIT that have run into trouble before and caused a dent in Singapore’s REIT sector. Despite some casualties, Singapore’s REIT market remains vibrant – largely thanks to the majority of S-REITs that continue to deliver good results to income investors.

In this article, we look at the performance of Singapore REITs with a listing history of at least 10 years. We wrote about the performance of S-REITs two years ago and this time around, we revisit the article by taking into account the latest share prices as at 31 Jan 2018 and dividends paid out to unitholders up to end-2017. We also made several adjustments such as pre-consolidation shares and dividends to get a more precise and accurate picture.

There are 19 Singapore REITs that IPOed in 2007 or earlier but Saizen REIT will be excluded since its underlying assets were fully divested in 2016.

Again, we assume that John (a fictional character) invests $1,000 in each of these REITs equally from the day the REIT listed. Since John is a hard-core income investor and wants to keep all his cash, he doesn’t want to come out with any money to subscribe to rights issuances (if any) and is prepared for any share dilution. Let’s also assume that John also forgets to sell his nil-paid rights from which he can make a profit from.

For example, if John invested in Fortune REIT during its IPO, his initial investment of $1,000 would’ve grown to $2,080 (+108% in capital gains) as at 31 Jan 2018. On top of that, he would have collected total dividends of $1,044 (+104% in dividends).

From the table above, John would’ve made a nice return in Fortune REIT as his initial investment of $1,000 would have grown to $3,084, including the dividends received over the years. If John invested $10,000, then his investment would’ve grown to $30,840. Basically, the more money he invests, the more he is going to make. And the longer he holds, the more dividends he is going to receive. In all, his annualised return from Fortune REIT alone is 7.9% from 2003 to 2018.

So after investing for more than ten years, here are the top 10 best-performing REITs for John.

Note: We’ve excluded brokerage costs, currency exchange gains/losses and taxes that might be applicable to foreign investors.

10. CapitaLand Commercial Trust (annualised return: 8.09%)
Since 2004, every $1,000 investment in CCT would’ve turned into $1,860. Including dividends, every $1,000 would cumulatively become $2,970.

9. Suntec REIT (annualized return: 8.9%)
Since 2004, every $1,000 investment in Suntec REIT would’ve turned into $2,070. Including dividends, every $1,000 would cumulatively become $3,290.

8. CapitaLand Mall Trust (annualised return: 9.0%)
Since 2002, every $1,000 investment in CMT would’ve turned into $2,190. Including dividends, every $1,000 would cumulatively become $3,990.

7. Mapletree Logistics Trust (annualized return: 9.5%)
Since 2005, every $1,000 investment in MLT would’ve turned into $2,010. Including dividends, every $1,000 would cumulatively become $3,240.

6. Frasers Centrepoint Trust (annualized return: 10.04%)
Since 2006, every $1,000 investment in FCT would’ve turned into $2,200. Including dividends, every $1,000 would cumulatively become $3,150.

5. First REIT (annualized return: 10.09%)
Since 2006, every $1,000 investment in First REIT would’ve turned into $1,990. Including dividends, every $1,000 would cumulatively become $3,170.

4. Ascott REIT (annualized return: 10.10%)
Since 2006, every $1,000 investment in Ascott REIT would’ve turned into $1,850. Including dividends, every $1,000 would cumulatively become $3,170.

3. Parkway Life REIT (annualized return: 10.99%)
Since 2007, every $1,000 investment in Parkway Life REIT would’ve turned into $2,340. Including dividends, every $1,000 would cumulatively become $3,150.

2. CDL Hospitality Trust (annualized return: 11.04%)
Since 2006, every $1,000 investment in CDL Hospitality Trust would’ve turned into $2,190. Including dividends, every $1,000 would cumulatively become $3,520.

1. Ascendas REIT (annualized return: 11.06%)
And the Singapore REIT that has returned the most so far is Ascendas REIT. Since 2002, every $1,000 investment in AREIT would’ve turned into $3,140. Including dividends, every $1,000 would cumulatively become $5,360!

In summary, here is John’s overall performance:

Though John has his wins, he also made a few mistakes and he lost money in LMIR Trust, Allco REIT, MacarthurCook Industrial REIT, and Saizen REIT (a shell company now). Thankfully he diversified his portfolio as it is never a good idea to put all your money in one single stock. So those losses are certainly not going to keep him awake at night. After all, his gains in those 15 Singapore REITs would be more than enough to cover the losses and still leave him with excess profit.

On top of that, John is still very profitable without having to come out with any additional capital to subscribe to any rights. However, if he had subscribed to them (including excess rights), he would have made more money since rights are usually sold at a discount. At the end of the day, John continues to receive regular quarterly dividends from his Singapore REITs in good times and in bad.

As you can see, REITs remain a good choice for anyone who wants to build a steady and consistent stream of passive income. However, please note that you shouldn’t buy or avoid a REIT just based on the data above as past performance is not necessarily indicative of future results.

It’s highly important to have a proper investment process to help you identify and invest in the right REITs that will give you a continual stream of passive income and capital gains down the road.

Rusmin Ang is an equity investor and co-founder of The Fifth Person. His investment articles have been published on The Business Times BTInvest section and Business Insider. He has also been featured multiple times on national radio on 938LIVE for his views and opinions on how to invest successfully in the stock market. Rusmin is on the speaking circuit for CIMB Securities (Malaysia) and has spoken at events in Penang, Sibu and Kuala Lumpur and is the co-author of Value Investing in Growth Companies published by Wiley, Inc. The book can be found in all major book stores worldwide and on Amazon.com, Barnes & Noble and Apple's iBooks. Rusmin was actually a former SIAEC scholar who gave up his scholarship and a cushy career to follow his itch of learning how to be a better investor and ultimately lead a life of financial independence. He believes that anyone, even with a regular job, can achieve more financial peace-of-mind by investing intelligently and safely for the long term.

13 Comments

  1. DUFY

    February 14, 2017 at 12:40 pm

    Thanks for the sharing. What if take into the rights issues assuminng that John would subscribe all the rights issue, then what will the ranking look like?

    Thanks.

    • Rusmin Ang

      February 17, 2017 at 5:57 pm

      Hello Dufy,

      I haven’t calculated the return if rights are included as it can be quite subjective. This also depends on the amount of excess rights subscribed and allotted successfully.

      But I think you bring up a good point. I could probably consider making another assumption where John subscribes to rights (ignoring excess rights) and measure his overall performance. Thanks!

  2. Melanie

    May 30, 2017 at 6:14 pm

    Hi, Thanks for the analysis. May i know how you calculated the CAGR returns? Can’t seem to figure that out. Thanks!

    • Rusmin Ang

      May 31, 2017 at 3:15 pm

      Hi Melanie,

      You can use the CAGR calculator from Investopedia. The initial value is the IPO share price and the final value is the latest share price (for this article it is 31 Jan 2017) plus accumulated dividends since IPO. Then count the number of periods for the REIT. You should be able to get CAGR very close to my estimate.

  3. Jonathan

    February 27, 2018 at 3:28 pm

    Thanks Rusmin. This is a useful analysis and should convince more people to invest in reits. It would really be even better if you could include those that has 5 year history. I suspect that some of these will have even more superior long term returns than even Ascendas.

    • Rusmin Ang

      February 28, 2018 at 10:06 am

      I think so too, especially if investors are courageous enough to add on to their positions in the good REITs during occasional corrections.

      A good example — Jonathan Lloyd (see his comment below) bought Parkway Life REIT at an attractive price vs. its IPO.

  4. Jonathan Lloyd

    February 27, 2018 at 8:57 pm

    I’ve done very well on my Singapore REITs. They’re easy to understand, mostly easy to analyse, and easy to manage your risks.

    My advice would be to apply for excess rights when the opportunity arises. It’s always made me money!

    Some of them make excellent investments during crises. One of the best investments I’ve ever made was Parkway-Life REIT during the global financial crises. I bought most of my holding at $1.09 a share!!! To date my return is over 157% excluding dividends.

    Next best A-REIT. 96.8% excluding dividends. My only regret is not buying more when they were cheap.

    • Rusmin Ang

      February 28, 2018 at 10:05 am

      Congrats, Jonathan! More to come for you 🙂

  5. FinancialHorse

    February 28, 2018 at 8:43 am

    Thanks for doing the sums. Really interesting that CDL hospitality trust ranks so highly.

    As Dufy commented above, would be really great if the future update includes the impact of rights issues, since objectively speaking most retail investors would take up their minimum entitlements and probably subscribe for excess rights.

    Cheers.

    • Rusmin Ang

      February 28, 2018 at 10:59 am

      Hi FinancialHorse, thanks for your feedback!

  6. tan andrew

    May 5, 2018 at 6:20 pm

    Hi Rusmin
    is it still not too late to invest in the Reits..do let me know.. thinking habing passive income . Thanks

    • Rusmin Ang

      May 7, 2018 at 12:16 pm

      Hi Andrew,

      It is never too late. It is only late if you never start now. REITs are attractive but you’d need to learn how to pick one that suits your own targets and risk appetite.

  7. Kuldeep

    June 12, 2018 at 6:43 pm

    Hi,

    Many Thanks for the analysis. Is it possible to have the return comparison for last 5 years only (in terms of stock price gains and distributions put together) for all the REITs in Singapore

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