5 Best Reits In Singapore

I am sharing on the 5 best Reits in Singapore based on stability, growth, risk and resiliency. I thought they will be great for any investment portfolios. However, being best does not mean that we should buy them now because their prices come at premium. Buying branded stuffs at high prices does not give much financial sense. DYODD.

1. Parkway Life Reit (SGX: C2PU)
It owns 53 properties worth S$1.96B including hospitals and medical facilities across Singapore (Mount Elizabeth, Gleneagles and Parkway East Hospital), Malaysia (MOB Specialist clinics in KL) and Japan (1 pharmaceutical distribution plant and 48 private nursing homes). These countries have ageing population demographics displaying growth in needs for healthcare services.
It is resilient and defensive in nature.
Its Japan's properties have a long WALE of 12.6 years. It runs master triple net lease terms of 15 years for the 3 local private hospitals, with option to renew another 15 years after Aug 2020. Its portfolio of nursing homes are run by 26 nursing home operators, with backup operators in place to minimise operator default risk.
It has never ask for money from retail and institutional shareholders through rights offering or preferential offerings  since IPO inception.
It is one of the only two healthcare Reits listed on SGX. It's 2nd lowest yield among all Reits implies that it has one of the lowest risks.
With increasing DPU, net property income and strong financial metrics, the main risks can be attributed to forex, default risk growing competition in healthcare business.
It is valuated at 1.7X book value at a yield of 4% at share price of $3.24 on 5 May 2020.

This Reit is on my watchlist and I will buy when the price is $3 or below, at closer to 1.5X book value and 4.5% yield.

2. Keppel DC Reit (SGX: AJBU)
It is the first and only pure data centre play on SGX riding on the waves of technology forefront, buoyed by the digital era of rapid cloud adoption, smart technologies, big-data analytics and 5G deployment. It owns 17 data centres valued at S$2.6B across 8 countries.
It has enjoyed robust and tremendous growth in portfolio since IPO. 12 out of 17 assets are fully leased. WALE is at 8.6 years, providing predictable steady income for long term. In 2019, the new leases were on 12.5 years and many are on triple net master leases.

Like PLife Reit, while its DPU and net property income have steadily increased along with other strong financial metrics, the main risks faced can be mainly attributed to forex and growing competition in data centre business.

It is currently overvalued at 2.0X book value at the lowest yield of 3.9% among all Reits at share price of $2.34 on 5 May 2020.

3. Mapletree Industrial Trust (SGX:ME8U)
It has the fusion of a pure Industrial Reit and Data Centre Reit characteristics. Its S$5.4B portfolio consists of 87 industrial properties in Singapore and 27 data centres in North America. Its resilient portfolio enjoyed steady growth and advanced towards data centres in recent years.
The WALE is 4.2 years and weighted average tenor of debt is 4.7 years.

Its steadily increasing DPU and net property income are very impressive and has generated more than 220% of returns for a shareholder who hold it since IPO. This is definitely a long term Reit for any income portfolio. However, downside risks include default risks caused by economy recession, large dependency on Singapore industrial sector, increasing leverage and USD Forex rate.

Its valuation is at 1.6X book value at a yield of 5.2% at share price of $2.57 on 5 May 2020.

4. Mapletree Logistics Trust (SGX: M44U)
It is a pure Asia logistics toy owning a well diversified of 143 logistics properties valued at S$8B across Asia in Singapore, Malaysia, Hong Kong, China, Japan, Australia, South Korea and Vietnam. Logistics operations are resilient in nature and boom during times of crisis such as the current pandemic as supplies of good and stockpile of unsold and transported products all require storage facilities.

Since IPO inception more than 10 years ago, its Net property income and DPU has rarely seen any dip. Through DPU accretive acquisitions strategically, its portfolio and income grew in tandem to reward shareholders consistently.

At a valuation of 1.3X book value at a yield of 4.5% at share price of $1.84 on 5 May 2020, there is still room for the share price to grow but it offers very little safety margin as it goes higher.

5. Ascendas Reit (SGX: A17U)
The King of Industrial Reits or rather the God of S Reits with the largest market capitalization of more than S$10B needs no further introduction. A $12.8B portfolio with 38 properties in UK, 28 Business Parks in US, 99 in Singapore and 35 in Australia.

Similar to its Mapletree disciples, its DPU and Net property income rewards from a defensive and resilient portfolio rewards long term shareholders with steady and consistent passive income.

Some downside risks include negative rental reversion, dropping occupancy due to the impact of this pandemic affecting smaller tenants that suspend operations, and high concentration of industrial properties in Singapore.

At share price of $2.94 on 5 May 2020, it has a book value of 1.3X and yield of 5.4%. There is still potential for further upside in its share price and room for more acquisitions in the future.

I hope the above provides a good overview of the best S Reits in my opinion. I intend to share the next 5 best Reits next week. Stay tuned. Thanks for reading! 

With Love & Peace,

Qiongster