REIT investors have not had an easy time.
The sector is grappling with the twin challenges of higher interest rates and soaring inflation.
Both headwinds are threatening to increase operating and finance expenses for REITs, crimping their distributable income and lowering their distribution per unit (DPU).
Persistent pessimism has caused the share prices of many REITs to plumb new lows.
Here are four Singapore REITs touching their 52-week lows, but can they see a possible rebound ahead?
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is an industrial and commercial REIT with a portfolio of 112 properties worth around S$6.8 billion.
These properties are spread across Singapore, the Netherlands, Australia, Germany, and the UK.
FLCT’s share price has tumbled 15% year to date (YTD) and recently touched its 52-week low of S$0.95.
The REIT reported a respectable set of earnings for the first half of fiscal 2024 (1H FY2024) ending 31 March 2024.
Revenue rose 3.9% year on year to S$216 million while adjusted net property income (NPI) inched up 1.8% year on year to S$158.7 million.
DPU slipped by 1.1% year on year to S$0.0348.
Investors were perhaps spooked by FLCT’s 34.5% year-on-year jump in finance costs which was caused by the increase in interest rates and drawdown of loans for capital expenditure and acquisitions.
The distribution of past divestment gains helped to cushion the REIT’s DPU.
FLCT’s portfolio occupancy stood high at 94.3%, with its industrial division seeing full occupancy while its commercial division recorded an occupancy level of 85%.
Investors should be pleased to note that the REIT reported a positive rental reversion of 14.2% for its latest quarter.
FLCT’s aggregate leverage stood at 32.7% with its cost of borrowing at 2.5% (last 12 months).
Close to 76% of the REIT’s loans were pegged to fixed rates.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties across eight countries.
Its assets under management (AUM) stood at S$13.2 billion as of 31 March 2024.
MLT’s unit price has tumbled close to 23% YTD and is close to its 52-week low of S$1.29.
The logistics REIT released a mixed set of earnings for its fiscal 2024 (FY2024) financials ending 31 March 2024.
Revenue rose 0.4% year on year to S$733.9 million but NPI stayed flat year on year at S$634.9 million.
DPU slid by 0.1% year on year to S$0.09003.
MLT had completed over S$1.1 billion of acquisitions in FY2024 of 12 modern, grade A assets.
The REIT also conducted a total of nine divestments across Singapore, Japan, and Malaysia during the fiscal year.
Earlier this week, MLT also announced another two divestments – one of a logistics warehouse in Xi’an, China, and the other of 119 Neythal Road in Singapore.
CapitaLand China Trust (SGX: AU8U)
CapitaLand China Trust, or CLCT, is a China-based REIT with a portfolio of nine shopping malls, five business park properties, and four logistics park properties.
CLCT’s share price plunged by 27.7% YTD to end at its 52-week low of S$0.66.
For 2023, gross revenue declined by 9.5% year on year to S$346.7 million while NPI dipped by nearly 3% year on year to S$246.7 million.
DPU fell by 10.1% year on year to S$0.0674.
For the first quarter of 2024 (1Q 2024), CLCT saw gross revenue dip by 1.6% year on year to RMB 468.1 million with NPI falling by 7.7% year on year to RMB 313.1 million.
Its retail segment displayed a high occupancy of 97.7% with shopper traffic and tenant sales rising by 17.4% and 12.6% year on year, respectively.
However, the logistics park division, which made up 7.1% of AUM, saw occupancy at just 67.6%.
The REIT’s gearing came in at 40.8% as of 31 March 2024 with an average cost of debt of 3.47%.
Total fixed-rate debt stood at three-quarters of CLCT’s total loans.
iREIT Global (SGX: UD1U)
iREIT Global is a European REIT with a portfolio of 53 properties across Germany, Spain, and France.
The REIT’s AUM stood at €874.5 million as of 31 March 2024.
iREIT Global’s unit price has declined by nearly 22% YTD to hit its 52-week low of S$0.32.
The REIT reported a stable performance for 1Q 2024 with portfolio occupancy at 91.5%.
Positive rental reversion of 11% was reported for its latest quarter along with rental escalation of 5.7%.
Aggregate leverage stood at 37% with a low average cost of debt of just 1.9%.
The REIT has no debt maturing until January 2026 and has hedged 97.1% of its loans to fixed rates.
The manager has taken action to rejuvenate the REIT’s properties by divesting underperforming assets such as Il-lumina in January this year.
Plans are afoot to increase the occupancy rate of portfolio assets, especially the Darmstadt Campus.
The manager also intends to refurbish and reposition the Berlin Campus into a multi-asset tenancy if the main tenant leaves in December 2024.
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Disclosure: Royston Yang owns shares of Frasers Logistics & Commercial Trust.
