AFTER a challenging year for Singapore-listed real estate investment trusts (S-Reits), they ended 2024 in the red, with the iEdge S-Reit Index generating a total return of minus 6.1 per cent, inclusive of distributions.
The S-Reit sector is now trading at a price-to-book ratio of 0.84 times, which represents a discount of around 16 per cent as compared with its longer-term average.
In the first half of 2024, S-Reits generated a total return of minus 11.4 per cent, but managed to recover more than half of their losses in the second half with a 6 per cent total return.
In September last year, the US Federal Reserve commenced its first rate reduction in four years, with the three rate cuts in 2024 bringing the Fed funds rate to 4.25 to 4.5 per cent as at the end of December, from 5.25 to 5.5 per cent at the end of 2023.
The full-year performance of S-Reits is in line with the FTSE EPRA Nareit Asia ex Japan Index’s minus 5.2 per cent total return.
Among the major Reit markets in the Asia-Pacific, Australian Reits generated a 13.4 per cent total return, while Japanese Reits and Hong Kong Reits generated minus 11.3 per cent and minus 19.7 per cent total returns, respectively.
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Specialised S-Reits achieved the highest total return of 9.7 per cent in 2024, maintaining their position as the top-performing sub-industry for the second consecutive year, following their performance in 2023.
Healthcare and retail S-Reits were also among the top-performing sub-industries last year, ranking second and third, respectively.
On the other hand, underperformers for the year were industrial, diversified and hospitality S-Reits.
The five best-performing S-Reits in 2024 in Singapore dollar terms were Frasers Hospitality Trust (24.3 per cent total returns), Keppel DC Reit (20.6 per cent), Stoneweg European Reit (20.2 per cent), Elite UK Reit (19 per cent), and Manulife US Reit (15.3 per cent).
In terms of fund flows, institutional investors recorded net outflows of S$1.6 billion, while retail investors recorded net inflows of S$1.6 billion.
Retail investors continued to net buy S-Reits after accumulating net retail inflows of S$790 million in 2023, and S$1.5 billion in 2022.
S-Reits also became more active in their equity fundraising (EFR) in 2024, raising over S$2.8 billion. EFR exercises launched by two S-Reits raised more than S$1 billion. SGX RESEARCH
The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
