THE first quarter of 2024 (till Mar 27) saw the FTSE EPRA Nareit Global Reits Index decline 0.6 per cent in total return. The iEdge S-Reit Index recorded greater total return declines of 7.3 per cent across the same period.
January and February 2024 saw the 41 S-Reits and property trusts average 4.8 per cent and 6.3 per cent total return declines, respectively, as expectations for easing interest rates were pushed later in the year than previously expected. In March, the sector rebounded 2.5 per cent (till Mar 27) as investor confidence in the sector returned, with the Federal Reserve foreseeing three rate cuts by the end of 2024.
In terms of fund flows, institutional investors net sold over S$560 million worth of S-Reits in Q1 2024.
On the other hand, retail investors continued to net buy the sector at over S$480 million, after accumulating retail net inflows of S$790 million and S$1.5 billion in 2023 and 2022, respectively.
Looking across the entire Singapore market, S-Reits was the most represented sector among the top 20 retail net buy stocks. There were eight S-Reits and property trusts among the top 20 stocks which recorded the most retail net inflows in Q1 2024.
These eights trusts – Mapletree Logistics Trust (MLT), Mapletree Pan Asia Commercial Trust (MPACT), Keppel DC Reit (KDCReit), CapitaLand Ascendas Reit, Frasers Logistics & Commercial Trust, CapitaLand China Trust, CapitaLand Ascott Trust and Suntec Reit – saw combined retail net inflows of over S$380 million in Q1 2024.
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MLT alone recorded a quarter of the sector’s Q1 2024 retail net inflows, at close to S$120 million. This was as it declined 14.9 per cent in total returns in Q1 2024, after gaining 15.6 per cent in 2023.
MLT was among the few S-Reits which announced growth in distribution per unit (DPU) in its latest business update. Its DPU for the nine months FY2023/24 grew 0.7 per cent year on year to 6.792 Singapore cents.
Towards the end of February, MLT also announced proposed acquisitions of a logistics property in Malaysia and two logistics properties in Vietnam. This is part of the Reit’s portfolio rejuvenation efforts. The Reit manager noted that MLT has announced or completed over S$200 million of divestments in the year to date, releasing capital which can be redeployed towards further acquisitions.
MPACT received S$55 million of retail net inflows in Q1 2024. MPACT was also among the top three S-Reits which recorded the most retail net inflows in 2023, at S$81 million.
In its previous nine months FY2023/24 update, it noted that while gross revenue and net property income grew by 21.2 per cent and 19.8 per cent year on year respectively, DPU was dampened by higher interest rates and the absence of one-off gains. MPACT is due to release its full year FY2023/24 financial results on Apr 4.
KDCReit recorded S$54 million of retail net inflows in Q1 2024. The year marks the 10th anniversary of KDCReit’s inception as Asia’s first pure-play data centre Reit. Since its listing in December 2014, the Reit has gained over 190 per cent in total returns and saw its assets under management grow from about S$1 billion to S$3.7 billion.
Besides these eight, there was one S-Reit which received net inflows from both institutional and retail investors in Q1 2024. Frasers Centrepoint Trust (FCT) recorded net inflows of S$6.4 million from institutional investors and S$4.5 million from retail investors.
The STI March quarterly review saw FCT added to the STI on Mar 18, 2024. The index inclusion also brought FCT’s daily average turnover from S$5.7 million in 2023 to S$7.9 million in Q1 2024, a 38 per cent increase.
Note that all Q1 2024 mentions represent the period up to Mar 27, 2024. SGX RESEARCH
