AROUND three-quarters of real estate investment trusts (Reits) and property trusts in Singapore have confirmed the release dates for their financial results or business updates for their respective periods ended Sep 30, 2024. Among them, 22 will report business updates and eight will report financial results.
Parkway Life Reit (PLife Reit) kicked off the current financial reporting season for Singapore Reits, or S-Reits, with the release of its third-quarter business update last week. Gross revenue for the year to Q3 declined by 2.2 per cent year on year, mainly due to depreciation of the Japanese yen.
However, its distribution per unit (DPU) for the period was 2.8 per cent higher year on year at 11.3 Singapore cents. This was due to the hedging of exchange rates with forward contracts, and higher distributable income from Singapore hospitals and some Japanese nursing homes with step-up lease agreements.
During the quarter, PLife Reit acquired a nursing home property in Osaka for 2.4 billion yen (S$20.7 million), about 9.1 per cent below valuation, bringing its Japan portfolio to 60 properties worth S$676.8 million in value.
PLife Reit continues to manage foreign exchange risks through hedging contracts and has secured long-term committed loans for pre-emptive refinancing of near-term debts. Post-refinancing, the Reit has no long-term debt refinancing needs until September 2026.
Keppel DC Reit (KDC Reit) reported higher DPU of 2.501 Singapore cents for Q3 2024, a 6.1 per cent increase quarter on quarter. Strong rental reversions also continued, marking the seventh consecutive quarter of positive reversions, including a more than 40 per cent reversion for a major contract renewal in Singapore.
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During the period, KDC Reit made its maiden entry into Japan, with the purchase of a hyperscaler data centre in Tokyo for 23.4 billion yen, representing a 2.5 per cent discount to its valuation. Post-acquisition, the Reit’s assets under management stand at S$3.9 billion with a total of 23 data centres across 10 countries in the Asia-Pacific and Europe.
In the last four weeks, the iEdge S-Reit Index fell slightly after its rally in the wake of the US Federal Reserve’s 50-basis-point rate cut on Sep 18. The index rose 14.8 per cent, with distributions bringing the total return to 17.5 per cent, but has since declined by about 2 per cent. The four weeks have also seen the rate outlook inch towards less accommodative, on account of the resilience of the US economy.
In the first half of 2024, S-Reits experienced net institutional outflows amounting to S$1.07 billion. Since then,16 per cent of this has reversed, with net inflows observed in the second half of 2024 up to Oct 15.
The S-Reit sector has now become one of the top four sectors for net institutional inflows since Jun 30. Notably, Acrophyte Hospitality Trust registered the highest net institutional inflow relative to market cap in the second half of 2024 up to Oct 15, driven by transactions associated with its significant rebranding. 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.
