The REIT sector has been under pressure lately because of a combination of high inflation and surging interest rates.
As a result, many REITs have tumbled to lows not seen in a while.
Income investors who are hunting for bargains may come across REITs that have been unfairly punished.
These REITs could simply be victims of poor investor sentiment.
We showcase four Singapore REITs that recently hit a year-low to see if they qualify as attractive bargains.
iREIT Global (SGX: UD1U)
iREIT Global invests in a portfolio of office, retail and industrial assets in Europe.
Its portfolio comprises five office properties in Germany, four office properties in Spain, and 44 retail properties in France.
The REIT’s unit price recently touched a 52-week low of S$0.33 and has tumbled by 29% in the past year.
iREIT Global released a mixed set of earnings for 2023.
Gross revenue rose 5.4% year on year to €65 million while net property income (NPI) inched up 2.3% year on year to €49.9 million.
However; the REIT’s distribution per unit (DPU) fell by 30.5% year on year to €0.0187.
The portfolio has an occupancy rate of 90.4% as of 31 December 2023 with a valuation of around €899 million.
iREIT’s manager has been active in capital recycling and recently completed the acquisition of 17 retailer properties in France occupied by discount retailer B&M Group (LON: BME).
It also completed the divestment of Il Lumina, a Spanish office building, for €24.5 million or 6.1% above independent valuation.
The REIT’s aggregate leverage stood at 37.9% with a low weighted average interest rate of 1.9%.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio of 63 properties worth around S$2.23 billion as of 31 December 2023.
The REIT owns three private hospitals in Singapore, 59 nursing homes in Japan, and strata-titled lots/units in a specialist clinic in Kuala Lumpur.
The healthcare REIT saw its unit price fall by 12.4% in the past year as it bounced off its 52-week low of S$3.33.
PLife REIT reported a strong set of earnings for 2023.
Gross revenue rose 13.5% year on year to S$147.5 million with contributions from acquisitions in 2022 and 2023 along with higher rent from Singapore hospitals under a new master lease agreement.
NPI increased by 14.1% year on year to S$139.1 million.
DPU edged up by 2.7% year on year to S$0.1477.
The healthcare REIT sported moderate gearing at 35.6%, allowing room for the REIT manager to acquire more properties using debt financing.
The all-in cost of debt stood at a low of 1.27%.
PLife REIT intends to deepen collaboration with existing and new partners to look for potential acquisitions while seeking to unlock value through the sale of non-core assets.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties across eight countries.
Assets under management (AUM) stood at S$13.3 billion as of 31 December 2023.
MLT’s unit price has tumbled by 16.1% in the past year to its 52-week low of S$1.41.
For the first nine months of fiscal 2024 (9M FY2024) ending 31 December 2023, MLT reported a mixed set of earnings.
Gross revenue inched up 0.2% year on year to S$552.9 million for 9M FY2024 but NPI dipped by 0.2% year on year to S$479.6 million.
DPU improved by 0.7% year on year to S$0.06792.
The logistics REIT boasted a high occupancy rate of 95.9% with a positive rental reversion of 3.8% for its latest quarter.
It completed two divestments in the third quarter of fiscal 2024 and is proposing another two divestments, all above valuation.
The REIT is also proposing to purchase a modern Grade A warehouse in Delhi NCR, India.
It had also just completed the acquisition of eight properties in Japan, South Korea, and Australia in 9M FY2024.
Suntec REIT (SGX: T82U)
Suntec REIT is a retail and commercial REIT that owns Suntec City Mall and interests in office assets in Singapore such as One Raffles Quay and Marina Bay Financial Centre.
The REIT also owns stakes in commercial properties in London and Australia.
Suntec REIT’s units recently touched their 52-week low of S$1.03 and are down 25% in the past year.
For 2023, the REIT’s gross revenue rose 8.3% year on year to S$462.7 million.
NPI, however, dipped by 0.8% year on year to S$313.2 million because of lower contributions from its Australian portfolio along with sinking fund contributions.
DPU plunged by 19.7% year on year to S$0.07135, principally due to higher financing costs and the weak Australian dollar.
Suntec REIT’s portfolio valuation remained stable at around S$11.9 billion for 2023, up marginally by 0.7% year on year.
The gearing ratio stood at 42.3% with an all-in financing cost of 3.84%.
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Disclosure: Royston Yang owns shares of Suntec REIT.
