8/5/2019 Highlights of Debt Profiles of SGX’s 34 REITs - Singapore Exchange Ltd

10 Jul 2019 | Category: Market Updates

REITs REITs

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■ To help S-REITs be er compete against private capital and their foreign peers when making asset acquisi ons, the MAS has
indicated it is considering raising the current leverage limit of 45%.

■ Currently, the 34 S-REITs average a debt-to-asset ra o of about 34%-35%. Based on indica ve data extracted from their latest
published financial statements and/or annual reports, these REITs may have the capacity to take on addi onal working capital
of approximately S$8.3 billion and S$15.4 billion, if they boosted leverage ra os to 40% and 45% respec vely.

■ If Singapore’s central bank li s the leverage limit to 50%, this could create combined working capital of approximately S$22.5
billion for the 34 S-REITs. REITs typically take on debt to fund capital-intensive acquisi ons – which allows them to grow their
por olios both domes cally and interna onally – as well as asset enhancement ini a ves. Such strategies help boost
distribu ons for unit holders.

■ Among the 34 REITs, Parkway Life REIT has the lowest all-in debt cost of 0.9% and highest ICR of 13.2x. Another three trusts –
Cromwell European REIT, Keppel DC REIT and IREIT Global – also have low all-in debt cost levels coupled with high interest
cover ra os.

SGX lists 34 REITs, seven stapled trusts and three property trusts with a combined market capitalisa on of more than S$100 billion.
S-REITs was the top net buy sector in January-June 2019, drawing net ins tu onal inflows of S$396.3 million.

REIT popularity in Singapore is exemplified in mul ple ways – they comprise one-tenth of Straits Times Index (STI) cons tuents, all of
the STI Reserve List stocks, approximately one-tenth of the total market capitalisa on of stocks listed on SGX, and a quarter of the
top 20 stocks by turnover on a day-to-day basis.

To help Singapore REITs be er compete against private capital and their foreign peers when making asset acquisi ons, the Monetary
Authority of Singapore (MAS) has indicated that it is considering raising the current leverage limit of 45%.

“The industry has provided feedback that at the current leverage limit of 45%, REITs face challenges when compe ng against other
bidders such as private equity funds, property companies and foreign REITs. These bidders o en have more flexibility to use debt to
op mise their capital structure,” Abigail Ng, Execu ve Director of the Monetary Authority of Singapore, said in a speech at the
REITAS Conference 2019 last week.

“Some have also pointed out that other REIT jurisdic ons have higher or no leverage limits. We have undertaken a review of this
area, and we see some room for recalibra on,” she added.

Singapore’s central bank also noted that one possible approach is to use a combina on of leverage limit and minimum interest cover
requirement (ICR) in determining the amount of leverage REITs can take on. They may take on higher leverage if they are able to meet
a minimum ICR.

Leverage, defined as the debt-to-asset ra o, measures how well-capitalised the trust is. The ICR measures the REIT’s debt-servicing
ability, and is calculated by dividing its net property income by interest expense.

The MAS is considering allowing a REIT's leverage to exceed 45%, but not breach the 50% mark, if the REIT has a minimum ICR of
2.5 mes a er taking into account interest payments arising from the new debt.

Previously, S-REITs could borrow up to 35% of their total assets, with the limit bumped up to 60% if it obtained a credit ra ng from a
ra ngs agency and disclosed it to the inves ng public. In 2015, the central bank replaced this with a single- er leverage limit of 45%.

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8/5/2019 Highlights of Debt Profiles of SGX’s 34 REITs - Singapore Exchange Ltd
Currently, the 34 REITs on SGX average a debt-to-asset ra o of about 34%-35%. Based on indica ve data extracted from their latest
published financial statements and/or annual reports, these S-REITs may have capacity to take on addi onal working capital of
approximately S$8.3 billion and S$15.4 billion if they boosted leverage ra os to 40% and 45% respec vely. If Singapore’s central
bank li s the leverage limit to 50%, this could create combined working capital of approximately S$22.5 billion for the S-REITs.

REITs typically take on debt to fund capital-intensive acquisi ons – which allows them to grow their por olios both domes cally and
interna onally – as well as asset enhancement ini a ves (AEIs) that include refurbishment of aged proper es. Such strategies help to
boost distribu ons for unit holders.

The table below details the debt profiles of the 34 REITs on SGX, sorted by name.

Weighted Interest Total Total

All-in Debt Debt/Asset
Name Average Debt Coverage Debt Assets
Cost (%) Ra o (%)
Tenor (Yrs) Ra o (x) (S$M) (S$M)

AIMS APAC REIT 2.4 5.0 3.6 499.7 1,484.8 33.7

ASCENDAS REIT 4.0 5.2 3.0 4,141.0 11,414.0 36.3

ASCOTT RESIDENCE
3.6 4.5 2.1 1,905.5 5,300.0 35.7
TRUST

BHG RETAIL REIT NA NA 4.2 226.1 695.3 32.5

CACHE LOGISTICS
3.8 4.3 3.9 494.2 1,412.7 37.4
TRUST

CAPITALAND
3.6 5.8 2.5 3,904.0 11,101.5 35.2
COMMERCIAL TRUST

CAPITALAND MALL
4.2 4.9 3.2 3,664.1 11,613.5 34.4
TRUST

CAPITALAND RETAIL
3.1 5.0 3.0 1,074.0 3,111.5 35.5
CHINA TRUST

CROMWELL
2.7 9.2 1.4 1,030.0 2,768.1 37.0
EUROPEAN REIT

EC WORLD REIT NA NA 4.9 476.9 1,515.8 31.3

ESR-REIT 2.8 3.7 4.0 1,268.2 3,050.7 42.0

FIRST REIT 2.2 NA 4.0 492.8 1,428.0 34.5

FORTUNE REIT* NA NA 2.9 1,544.8 7,433.8 20.9

FRASERS
2.4 6.0 2.8 813.0 2,840.4 28.8
CENTREPOINT TRUST

FRASERS
2.6 4.7 3.0 627.6 2,158.2 29.1
COMMERCIAL TRUST

FRASERS LOGISTICS & 2.4 7.5 2.4 1,036.4 2,968.6 35.1

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8/5/2019 Highlights of Debt Profiles of SGX’s 34 REITs - Singapore Exchange Ltd

INDUSTRIAL TRUST

IREIT GLOBAL 6.8 10.0 1.5 304.2 804.9 38.0

KEPPEL DC REIT 3.3 12.9 1.7 746.4 2,260.2 32.5

KEPPEL REIT 3.3 4.1 2.9 2,930.0 8,380.0 35.7

KEPPEL-KBS US REIT 3.6 4.7 3.8 573.4 1,513.8 38.1

LIPPO MALLS Excl. perps

INDONESIA RETAIL 2.0 NA 5.1; Incl. 674.5 2,004.3 33.9
TRUST perps 5.6

MANULIFE US REIT 2.5 3.9 3.3 911.9 2,440.0 37.6

MAPLETREE
3.6 4.5 3.0 2,349.0 7,100.8 33.1
COMMERCIAL TRUST

MAPLETREE
4.4 6.5 3.0 1,559.5 4,607.1 33.8
INDUSTRIAL TRUST

MAPLETREE
4.1 4.9 2.7 2,993.7 8,078.3 37.7
LOGISTICS TRUST

MAPLETREE NORTH
ASIA COMMERCIAL 3.7 4.2 2.5 2,867.9 7,820.4 36.6
TRUST

OUE COMMERCIAL
3.3 3.3 3.5 1,723.2 4,581.4 39.4
REIT

PARKWAYLIFE REIT 3.3 13.2 0.9 687.1 1,892.2 36.4

SABANA SHARIAH
1.1 3.9 4.2 319.0 1,023.3 33.9
INDUSTRIAL REIT

SASSEUR REIT 3.8 5.1 4.5 513.0 1,768.7 29.2

SOILBUILD BUSINESS
3.1 3.9 3.5 480.1 1,248.0 39.3
SPACE REIT

SPH REIT 2.1 NA 2.9 1,093.7 3,619.7 30.1

STARHILL GLOBAL
3.0 3.8 3.3 1,132.0 3,168.0 35.7
REIT

SUNTEC REIT 3.3 2.9 3.0 3,548.7 9,537.4 38.6

Source: Latest published financial statements, presenta on material and/or annual reports
NA: Not Available
Note: Cromwell, IREIT, Fortune, Frasers Logis cs, Manulife and Keppel-KBS report in EUR, HKD, AUD and USD respec vely with
SGD values shown in table
*Fortune REIT, which is dual-listed on HKEx, plans to delist from SGX

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8/5/2019 Highlights of Debt Profiles of SGX’s 34 REITs - Singapore Exchange Ltd
Among the 34 REITs, Parkway Life REIT has the lowest all-in debt cost of 0.9% and the highest ICR of 13.2 mes. Another three
trusts have low all-in debt cost levels coupled with high interest cover – Cromwell European REIT has all-in debt cost of 1.4% and ICR
of 9.2 mes, Keppel DC REIT has all-in debt cost of 1.7% with ICR of 12.9 mes, while IREIT Global has all-in debt cost of 1.5% with
ICR of 10.0 mes.

The table below details the performances of the 34 REITs listed on SGX, sorted by market capitalisa on.

Market Total Total Total

SGX 12M Div P/B
Name Cap Return Return 1Y Return 3Y
Code Ind Yld (%) (x)
(S$M) YTD (%) (%) (%)

CapitaLand Mall Trust C38U 9,996 22.1 37.2 13.6 4.4 1.1

Ascendas REIT A17U 9,681 24.3 23.4 14.3 5.2 1.2

CapitaLand
C61U 8,474 32.2 36.7 20.8 4.0 1.0
Commercial Trust

Mapletree Commercial
N2IU 6,050 29.9 38.6 18.9 4.4 1.1
Trust

Mapletree Logis cs
M44U 5,924 33.1 36.8 24.3 5.0 1.0
Trust

Suntec REIT T82U 5,533 14.8 20.0 9.1 4.9 0.9

Mapletree Industrial
ME8U 4,654 24.1 24.1 15.6 5.4 1.4
Trust

Mapletree North Asia

RW0U 4,645 32.0 34.4 19.9 5.1 0.8
Commercial Trust

Keppel REIT K71U 4,355 14.9 22.0 11.6 4.4 0.8

Fortune REIT F25U 3,695 26.2 25.8 10.3 4.7 0.7

Frasers Centrepoint
J69U 2,973 27.4 28.5 14.6 4.1 1.1
Trust

SPH REIT SK6U 2,845 13.0 16.8 11.3 5.0 1.1

Asco Residence Trust A68U 2,805 23.5 27.1 13.1 5.5 0.8

Frasers Logis cs &

BUOU 2,615 29.1 27.4 17.6 6.4 1.2
Industrial Trust

Keppel DC REIT AJBU 2,326 30.7 30.5 20.5 4.3 1.5

Parkway Life REIT C2PU 1,839 18.3 16.7 9.9 4.3 1.6

Cromwell European
CNNU 1,830 16.1 -4.1 N/A 12.7 1.0
REIT

ESR-REIT J91U 1,825 11.5 16.4 7.4 7.3 0.8

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8/5/2019 Highlights of Debt Profiles of SGX’s 34 REITs - Singapore Exchange Ltd

Starhill Global REIT P40U 1,734 20.5 29.3 6.5 5.6 0.8

Manulife US REIT BTOU 1,672 21.4 12.6 10.9 5.9 1.2

CapitaLand Retail
AU8U 1,588 20.9 14.4 8.8 6.5 1.0
China Trust

OUE Commercial REIT TS0U 1,518 18.2 -6.9 2.6 6.1 0.6

Frasers Commercial
ND8U 1,513 26.0 30.3 15.7 5.7 0.9
Trust

AIMS APAC REIT O5RU 1,020 14.8 15.6 9.5 7.0 1.0

Sasseur REIT CRPU 953 31.7 31.5 N/A 8.3 0.9

Keppel-KBS US REIT CMOU 872 32.5 2.8 N/A 7.7 1.0

Cache Logis cs Trust K2LU 852 18.4 13.5 6.6 7.5 1.1

First REIT AW9U 832 11.2 -13.4 0.4 8.0 1.3

Lippo Malls Indonesia

D5IU 695 37.2 -17.4 -4.6 8.2 1.0
Retail Trust

Soilbuild Business
SV3U 659 11.6 3.0 6.0 8.3 1.0
Space REIT

EC World REIT BWCU 605 14.6 15.6 5.2 8.2 0.8

IREIT Global UD1U 495 11.7 10.7 10.0 7.4 1.1

Sabana Shari'ah
M1GU 490 23.5 15.0 8.0 6.6 0.8
Industrial REIT

BHG Retail REIT BMGU 351 0.5 2.3 4.9 7.4 0.9

Source: Bloomberg & StockFacts (data as of 8 July 2019)

Note: Cromwell, IREIT, Fortune, Frasers Logis cs, Manulife and Keppel-KBS report in EUR, HKD, AUD and USD respec vely with
SGD values shown in table
*Fortune REIT, which is dual-listed on HKEx, plans to delist from SGX

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