REITs – BT

Reits outshine STI; healthcare plays lead

THE majority of Singapore real estate investment trusts (Reits) outperformed the Straits Times Index (STI) last year, data from the Singapore Exchange (SGX) shows.

Of the 22 Reits here, 17 performed better than the benchmark index – which ended down 17 per cent in 2011 – with healthcare-related plays leading the way.

In price performance terms, Parkway Life (PLife) Reit – which holds Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital – floated to the top of the chart with an 8.5 per cent gain in its unit price last year.

PLife Reit said last year that it remained positive on the long-term prospects of the regional healthcare industry, given the rising demand for better-quality private healthcare services that is being driven by growing affluence and a fast-ageing population.

Its sector peer, First Reit, was ranked second, with a price return of 7 per cent.

The remaining 20 Reits, of which 15 did better than the STI, posted negative price returns in 2011.

Top loser was K-Reit Asia, which saw its unit price slump 36.2 per cent. The office property trust underwent a 17-for-20 rights issue to raise about $976 million to fund its purchase of Keppel Land’s controlling stake in Ocean Financial Centre.

The next poorest performer was CapitaCommercial Trust, which ended the year with negative returns of 29.7 per cent.

Taking into account price and dividends, First Reit – Singapore’s first healthcare Reit – provided the highest total return of 16.3 per cent in 2011. PLife Reit was ranked second with 14.4 per cent gains in total return terms.

First Reit offered a dividend yield of 9.3 per cent – the highest among the 22 Reits – while that of PLife Reit was 5.9 per cent.

Others that emerged stronger in total returns include Mapletree Industrial Trust and Cache Logistics, which offered gains of 6.4 per cent and 7 per cent, respectively.

K-Reit Asia was also the biggest loser in total return terms, with a 32.8 per cent drop in returns. It was followed by CapitaCommercial Trust, which registered a 25.9 per cent fall in total return terms.