Top 10 Singapore REITs that made you money if you invested from their IPOs (updated 2020)

Top 10 Singapore REITs that made you money if you invested from their IPOs (updated 2020)

Last year, Singapore welcomed four new REIT listings: ARA US Hospitality Trust, Eagle Hospitality, LendLease Global Commercial REIT, and Prime US REIT. Among them, Eagle Hospitality probably got the most attention, albeit for the wrong reasons.

Eagle Hospitality’s largest asset is The Queen Mary, a luxury cruise ship which was converted into a hotel and permanently parked at Long Beach, California. The Edge Singapore pointed out that the retired cruise ship might sink into disrepair due to poor maintenance. Even if the repairs are carried out, it would cost a bomb and the amount would balloon to as high as twice the amount of its asset value. Upon news of this, the unit price of Eagle Hospitality quickly tanked from 66 cents to as low as 42 cents in less than a couple of weeks. Anyone who subscribed to Eagle Hospitality units during its IPO at 78 cents per unit would be sitting on paper loss of 46%.

As I read some posts made on the HardwareZone forums, someone commented that ‘Singapore is home to APAC’s largest collection of weird and shitty REITs and Eagle Hospitality is one of them’. While I agree that Singapore has a large selection of REITs, I disagree that many of them are ‘weird and shitty’. Truth be told, the historical performance of Singapore REITs (S-REITs) — as you will soon see — tells us otherwise; most REITs in Singapore have performed remarkably well! This is exactly the reason why many REITs choose Singapore as their preferred market to list in. 

But there are a few bad apples and Eagle Hospitality isn’t alone. Sabana Shari’ah Compliant REIT is similarly underwater; its current share price is merely half its IPO price. Also, there are several other S-REITs like Saizen REIT, MacarthurCook Industrial REIT, and Allco REIT that ran into trouble in the past and caused a dent in Singapore’s REIT sector. Despite this, Singapore’s REIT market remains vibrant – largely thanks to the majority of S-REITs that have continued to deliver great results for dividend investors like us.

The top 10 Singapore REITs since their IPO

I first wrote about the performance of S-REITs four year ago and this time around, I will update their results by taking into account their latest share prices as at 31 January 2020 and dividends paid to unitholders up to then. The REITs in my study would have had to be listed for at least 10 years in order to have a track record of long-term underlying performance. I also made adjustments for pre-consolidated units and distributions to get a more accurate picture. In all, there are 22 Singapore REITs that listed in 2010 or earlier. But Saizen REIT and Fortune REIT will be excluded as they have since delisted from the SGX.

Once again, we will assume that John (a fictional character) invests $1,000 equally in each REIT from the day it listed. Since John is a hard-core income investor and wants to keep all his cash, he doesn’t want to cough out any money to subscribe to any rights issues and is comfortable with any share dilution. Let’s also assume that John also forgoes to sell his nil-paid rights from which he can obviously make a profit from.

For example, if John invested in CapitaLand Commercial Trust (CCT) from its IPO, his initial investment of $1,000 would’ve grown to $2,060 (+106% in capital gains) as at 31 January 2020. On top of that, he would have collected total dividends of $1,188 (+119% in distributions).

From the table above, John would’ve made a nice return in CCT as his initial investment of $1,000 would have grown to a total of $3,250, including dividends received over the years. If John invested $10,000, then his investment would’ve grown to $32,500. Basically, the more money he had invested, the more he would have made. And the longer he holds onto his REITs, the more dividends he will receive. In all, his annualised return from CCT is 7.64% from May 2004 to January 2020. Such a return is certainly many times higher than what the bank can offer us with their low interest rates today. 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 movements, and taxes that might be applicable to foreign investors.)

10. CapitaLand Commercial Trust (annualised return: +7.64%)
Since 2004, every $1,000 investment in CCT would’ve turned into $2,060. Including dividends, this would cumulatively become $3,250.

9. First REIT (annualised return: +7.69%)
Since 2006, every $1,000 investment in First REIT would’ve turned into $1,420. Including dividends, this would cumulatively become $2,182. 

8. CapitaLand Mall Trust (annualised return: +8.66%)
Since 2002, every $1,000 investment in CMT would’ve turned into $2,630. Including dividends, this would cumulatively become $4,460. 

7. Ascott REIT (annualised return: +8.93%) 
Since 2006, every $1,000 investment in Ascott REIT would’ve turned into $1,850. Including dividends, this would cumulatively become $3,310.

6. CDL Hospitality Trust (annualised return: +9.19%) 
Since 2006, every $1,000 investment in CDL Hospitality Trust would’ve turned into $1,880. Including dividends, this would cumulatively become $3,430. 

5. Mapletree Logistics Trust (annualised return: +10.05%) 
Since 2005, every $1,000 investment in MLT would’ve turned into $2,710. Including dividends, this would cumulatively become $4,210.

4. Frasers Centrepoint Trust (annualised return: +10.54%)
Since 2006, every $1,000 investment in FCT would’ve turned into $2,800. Including dividends, this would cumulatively become $4,060. 

3. Ascendas REIT (annualised return: +10.64%)
Since 2002, every $1,000 investment in Ascendas REIT would’ve turned into $3,580. Including dividends, this would cumulatively become $6,170. 

2. ParkwayLife REIT (annualised return: +10.84%) 
Since 2007, every $1,000 investment in ParkwayLife REIT would’ve turned into $2,800. Including dividends, this would cumulatively become $3,810. 

1. Mapletree Industrial Trust (annualised return: +14.87%)
Since 2010, every $1,000 investment in MIT would’ve turned into $2,990. Including dividends, this would cumulatively become $4,000. 

In summary, here is John’s overall performance:

The most impressive REIT in John’s portfolio, in term of absolute return, is Ascendas REIT. Every $1,000 investment in Ascendas REIT would’ve turned into $6,170! His net gain in Ascendas REIT alone is more than enough to cover his losses in four worst-performing S-REITs.

Most importantly, John is still very profitable even without coming up with any additional capital to subscribe to any rights. However, if he had subscribed to them (including excess rights), he would have made even more money since rights are usually sold at a discount to market prices. At the end of the day, John continues to receive regular quarterly dividends from his S-REITs in both good and bad times. As you can see, REITs remain a great choice for anyone who wants to build a steady and consistent stream of passive income.

Please note that you shouldn’t buy or sell any of the REITs in this article solely based on the data above as past performance is not necessarily indicative of future results. It’s highly important to have a proper investment framework to help you identify and invest in only the high-quality REITs that will give you continual streams of passive income and capital gains down the road.

Finally, just a quick reminder: 2020 applications to join Dividend Machines close on Sunday, 1 March 2020, at 23:59 hours. If you’re looking for a way to learn how to invest in dividend stocks and REITs and build multiple streams of passive dividend income, then we highly recommend you check out Dividend Machines before applications close!

Once the deadline has passed, Dividend Machines will only reopen in 2021. So if you miss this round, you’ll have to wait a year (or more) before we accept new applications again.

Happy investing and we hope to see you on the inside 🙂

Rusmin Ang is an equity investor and co-founder of The Fifth Person. His investment articles have been published on The Business Times and Business Insider. Rusmin has appeared on Channel NewsAsia and on national radio on Money FM 89.3 for his views and opinions on how to invest successfully in the stock market. 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.

24 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 🙂

      • Ronny

        February 19, 2020 at 7:36 am

        How about Keppel DC Reit and Ec World

        • Rusmin Ang

          February 19, 2020 at 4:21 pm

          Both REITs do not have a listing record of at least ten years, that’s why we excluded them from our studies.

  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

    • The Fifth Person

      June 13, 2018 at 9:55 pm

      Hi Kuldeep,

      We only did the research from the REITs respective IPO onwards for this article 🙂

  8. chris

    February 19, 2019 at 9:06 pm

    Hi,

    Is it really that bad to have a single stock? Tho i felt some of the reits are actually pretty safe & defensive esp N2IU.SI

    • Rusmin Ang

      February 20, 2019 at 1:21 pm

      It is only bad if you pick the wrong stock, but from a risk management point of view, it is always better to diversify across a few good REITs. As the saying goes: Protect your downside and the upside will take care of itself. I think this is true and most people on the street should follow this sound advice.

  9. YTK

    February 18, 2020 at 12:53 pm

    May we know Fortune Reit DPU for Feb 2020.
    Thanks.

  10. Sharon

    February 18, 2020 at 11:45 pm

    Happy to see MIT in first place! It’s like seeing your kid grow up and ace in life. Feeling proud like a parent. Haha.

    I was overjoyed to be allocated 1,000 shares during their IPO.

    Since I don’t know how to sell them (or buy them for that matter…never really bothered to learn or monitor it and life just rolls by…), I kept it until now.

    Heng, this kid turned out OK. LOL.

    • Rusmin Ang

      February 19, 2020 at 10:13 am

      Congrats, Sharon! Time to attend the AGM and say thanks to the management. Lol!

  11. Jonathan

    May 3, 2020 at 7:58 am

    Good Morning,

    Seeking your feedbac on 2 REIT’s namely ARA Logos Trust and EC World Reit.
    Both REIT’s are in the logistics and warehouse business and currently trading below their NAV.
    With current pandemic, online sales have surged expecting this trend to continue as more businesses will come on board to offer their services and products online. Hence I am expecting bigger demand for warehouses in the near future.
    Are there any withholding tax/fees for foreign investors who buy REIT’s listed in SGX? Is the full DPU provided to foreign investors or is there withholding period before the DPU is released?

    Looking to add them to my portfolio for mid-long term investment ie 1- 2 years.Expected returns 12-15% with dividends included.

    Thank you.

    Best Regards
    Jonathan.

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