Equity Research Deep Dive: Comprehensive Analysis of S-REITS & Business Trusts – 3 March 2025

Equity Research Deep Dive: Comprehensive Analysis of S-REITS & Business Trusts

Published by: OCBC Investment Research Private Limited
Date of Report: 3 March 2025

Overview & Market Highlights

This comprehensive research report provides a detailed weekly update on S-REITS and Business Trusts, examining performance across multiple real estate subsectors – office, retail, industrial, hospitality, healthcare, data centre and others – along with business trusts in real estate, infrastructure, and ports & shipping. The report outlines key takeaways such as adjustments to distribution forecasts, refinancing updates, and a review of supply‐demand dynamics for Singapore assets relative to overseas exposure. Notably, Stoneweg European REIT revised its distribution per unit (DPU) expectations following an early bond refinancing and an ESG rating downgrade, while market trends indicate a continued preference for REITs capable of exhibiting sustained DPU growth, strong sponsor backing, and sound financial positions.

Key Developments & Recent News

Stoneweg European REIT: Reported an FY24 DPU of 14.106 Euro cents, matching expectations at 100.5% of forecast. However, early refinancing of bonds led to downward revisions of FY25 and FY26 DPU forecasts by 11.8% and 8.6% respectively, along with an upward adjustment of the risk-free rate to 2.75% and a slight penalty on the adjusted beta. The fair value estimate was reduced from EUR1.89 to EUR1.81.
Suntec REIT: Entered into a GBP205m facility agreement to refinance a GBP175m term loan originated in July 2021.
Keppel DC REIT: Launched its inaugural Green Financing Framework targeting eligible data centre projects with criteria spanning green buildings, renewable energy, and energy efficiency, among others.
Frasers Centrepoint Trust: Priced SGD80m in fixed rate green notes (3.3% due 2032) scheduled for issue on 3 March 2025.

S-REITs Deep Dive Across Sectors

Office Sector

The office segment comprises several REITs that are integral to Singapore’s real estate landscape. Companies in this segment include IREIT Global, Keppel REIT, Manulife US REIT, OUE REIT, Suntec REIT, Keppel Pacific Oak US REIT, Prime US REIT, and Elite UK REIT. These REITs display a mix of exposure ranging from domestic office assets to international portfolios.

IREIT Global: Traded at SGD0.260 with a market cap of SGD349.7m and a reported DPU of 1.41 cents (current) rising to 2.81 cents on a forward basis. Its yields, based on recent figures, underline moderate growth expectations.
Keppel REIT: Priced at SGD0.800 with a substantial market cap of over SGD3,096.5m. It posts a current DPU of 5.60 cents, with a forward DPU of 5.70 cents and yields reflecting steady performance.
Manulife US REIT: Although detailed DPU data is not available, this REIT focuses on the US market with a market cap of USD129.7m. The absence of current DPU figures is notable, while its strategic positioning in the global office sector requires further monitoring.
OUE REIT: Trading at SGD0.275 with a market cap of SGD1,512.5m, it posted a current DPU of 1.90 cents and forward DPU of 2.00 cents. The company has also announced a distribution of SGD0.200—with key dates culminating on 5 March 2025—demonstrating a disciplined payout approach.
Suntec REIT: At a price of SGD1.140 and a market cap of SGD3,344.7m, Suntec REIT exhibits stable performance with current and forward DPUs of 6.30 and 6.80 cents respectively. Its recent refinancing activity is a focal point, and while its trading status is currently rated as HOLD (fair value in line with the trading price), the strategic facility agreement might pave the way for future improvements.
Keppel Pacific Oak US REIT: With a trading price of USD0.210 and a market cap of USD219.3m, this REIT is purely focused on the US market, maintaining a 100% exposure.
Prime US REIT: Trading at USD0.140, it has a market cap of USD183.2m, with modest DPU figures and a return profile that has seen some pressure, reflected by a -15.7% yield gap. It is positioned to serve niche segments of the US office market.
Elite UK REIT: Priced at GBP0.300 with a smaller market cap of GBP176.1m, it posts relatively higher yields and maintains a consistent DPU growth trend within the competitive UK office market.

Retail Sector

Retail REITs benefit from strong local demand dynamics in Singapore. This segment includes BHG Retail REIT, CapitaLand Integrated Commercial Trust, CapitaLand China Trust, Frasers Centrepoint Trust, Lippo Malls Indonesia Retail Trust, Paragon REIT, Starhill Global REIT, Sasseur REIT, and United Hampshire US REIT.

BHG Retail REIT: Trading at SGD0.460 with a market cap of SGD239.0m, this REIT focuses on high-quality retail assets, although specific DPU figures remain unreported.
CapitaLand Integrated Commercial Trust: At a price of SGD1.970 and a robust market cap of SGD14,378.0m, it records a current DPU of 11.10 cents, expected to rise to 11.70 cents. It is noted for its stable yield and attractive growth prospects, rated as BUY.
CapitaLand China Trust: With a trading price of SGD0.665 and a market cap of SGD1,144.0m, it posts DPU figures of 5.70 cents (current) and 5.60 cents (forward), emphasizing consistency in returns and a BUY recommendation.
Frasers Centrepoint Trust: Trading at SGD2.050 with a market cap of SGD3,727.4m, it represents the retail segment with a strong DPU track record – 12.00 cents currently and 12.40 cents forward – and is recommended as BUY.
Lippo Malls Indonesia Retail Trust: At a very low trading price of SGD0.015 and a market cap of SGD115.5m, it faces challenges evident from its DPU figures and negative returns, currently not having DPU data available.
Paragon REIT: Priced at SGD0.965 and boasting a market cap of SGD2,739.6m, Paragon shows moderate DPU figures (4.60 cents current, 4.40 forward) with a modest yield, and its profile reflects a balanced, though less aggressive, growth strategy.
Starhill Global REIT: Trading at SGD0.485 with a market cap of SGD1,111.6m, it posts robust DPUs (3.70 current, 3.80 forward), with a price performance that leads to a HOLD rating by the research team.
Sasseur REIT: At a trading price of SGD0.690 and market cap of SGD863.0m, it offers DPUs of 6.10 (current) and 6.30 (forward), delivering strong yield metrics which are attractive in the retail domain.
United Hampshire US REIT: Trading at USD0.490 and holding a market cap of USD285.9m, it provides exposure to the US retail market with DPUs of 4.10 (current) and 4.40 (forward), alongside solid yield figures.

Industrial Sector

Industrial REITs remain resilient even as rental consolidation emerges after five years of robust growth. In this segment are AIMS APAC REIT, CapitaLand Ascendas REIT, ESR-LOGOS REIT, Frasers Logistics & Commercial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, Sabana REIT, and Daiwa House Logistics Trust.

AIMS APAC REIT: Trading at SGD1.230 with a market cap of SGD1,001.2m, it posts DPUs around 9.40 cents, with a distribution yield that reflects healthy near-term returns. It is recommended as BUY with a fair value of SGD1.49 compared to its current price of SGD1.23.
CapitaLand Ascendas REIT: Priced at SGD2.570 with a market cap of SGD11,309.4m, this REIT exhibits strong performance with current and forward DPUs of 15.20 and 15.90 cents respectively. It is a top BUY with an attractive fair value of SGD3.30.
ESR-LOGOS REIT: Trading at SGD1.500 with a market cap of SGD843.6m, it posted DPUs of 13.80 (current) and 13.30 (forward) cents. Despite minor headwinds leading to a slight reduction in returns, its performance remains solid.
Frasers Logistics & Commercial Trust: At a price of SGD0.835 and a market cap of SGD3,141.4m, it offers a current and forward DPU of 6.40 cents each, along with stable yield metrics. The research team recommends this REIT as a BUY.
Mapletree Industrial Trust: Trading at SGD1.980 with a market cap of SGD5,639.9m, it records DPUs of 13.80 (current) and 13.60 (forward) cents. It is considered a BUY with strong fundamentals in the industrial space.
Mapletree Logistics Trust: At a price of SGD1.230 and market cap of SGD6,232.1m, it posts DPUs of 8.10 (current) and 8.00 (forward) cents, maintaining its competitive yield and earning a BUY rating.
Sabana REIT: Trading at SGD0.365 with a market cap of SGD410.6m, although detailed DPU data is not available, its performance metrics hint at niche appeal within the industrial segment.
Daiwa House Logistics Trust: With a price of SGD0.585 and a market cap of SGD408.6m, it offers DPUs of 5.00 cents consistently, and investors appreciate its focus on quality logistics assets, supporting a BUY recommendation.

Hospitality Sector

In the hospitality arena, the trend is for growth to normalise. The sector includes Acrophyte Hospitality Trust, CapitaLand Ascott Trust, CDL Hospitality Trusts, Far East Hospitality Trust, and Frasers Hospitality Trust.

Acrophyte Hospitality Trust: Trading at USD0.215 with a market cap of USD124.7m, it posts DPUs of 1.70 (current) and 1.80 (forward) cents with yield metrics supporting a BUY recommendation despite current market headwinds.
CapitaLand Ascott Trust: Priced at SGD0.860 with a market cap of SGD3,277.8m, it generates DPUs of 6.10 (current) and 6.40 (forward) cents. The strong payout and consistent yield underpin its BUY rating.
CDL Hospitality Trusts: Trading at SGD0.775 with a market cap of SGD975.6m, it shows DPUs of 5.70 (current) and 6.00 (forward) cents, though recent performance volatility has been noted.
Far East Hospitality Trust: With a trading price of SGD0.545 and a market cap of SGD1,099.0m, it consistently posts DPUs of 3.90 cents, delivering stable yields under a BUY outlook.
Frasers Hospitality Trust: Trading near SGD0.520 with a market cap of SGD1,001.6m, its DPU performance of 2.10 cents (both current and forward) reflects a more cautious stance, resulting in a HOLD rating.

Healthcare Sector

The healthcare segment is represented by First REIT and Parkway Life REIT, which focus on income generation through specialised healthcare assets.

First REIT: Trading at SGD0.265 with a market cap of SGD556.2m, it posts DPUs of 2.50 (current) and 2.60 (forward) cents, offering solid yield performance though it is rated as HOLD.
Parkway Life REIT: At a trading price of SGD3.790 and an impressive market cap of SGD2,472.6m, it delivers robust DPUs of 15.00 (current) and 17.80 (forward) cents. Its consistent performance earns it a BUY recommendation.

Data Centre Sector

Data centre REITs continue to gain traction as digital infrastructure expands. The main players in this segment are Keppel DC REIT and Digital Core REIT.

Keppel DC REIT: Trading at SGD2.070 with a market cap of SGD4,669.0m, this REIT posts DPUs of 10.10 (current) and 11.00 (forward) cents. Its exposure to data centre assets and the recent initiation of a green financing framework support a BUY rating.
Digital Core REIT: At a trading price of USD0.565 with a market cap of USD733.7m, it generates DPUs of 3.60 (current) and 3.90 (forward) cents. With a focused digital asset portfolio, it remains an appealing buy with an attractive yield profile.

Others

This category is represented by Stoneweg European REIT – a unique player with European exposure. Although its recent refinancing and ESG rating downgrade resulted in slightly lower forecast DPUs, the REIT’s fundamentals have been adjusted accordingly.

Stoneweg European REIT: Trading at EUR1.500 with a market cap of EUR843.6m, it posted current and forward DPUs at 13.80 and 13.30 cents respectively. Following early bond refinancing and subsequent forecast revisions, it now has a fair value estimate of EUR1.81 and is firmly rated as BUY.

Business Trusts Analysis

Real Estate Business Trusts

This segment includes CapitaLand India Trust and Dasin Retail Trust. These trusts focus primarily on regional property assets.

CapitaLand India Trust: Trading at SGD0.960 with a market cap of SGD1,295.4m and an FYE of 94.4%, it recorded a current DPU of 7.40 cents and a forward DPU of 8.50 cents. Given its dividend yield and asset quality, it is recommended as BUY.
Dasin Retail Trust: A smaller trust trading at SGD0.020 with a market cap of just SGD16.1m. Despite the lack of available DPU data, recent performance trends indicate significant challenges with returns trailing into negative territory, reflecting its underperformance in the current landscape.

Infrastructure Business Trusts

The infrastructure trusts provide exposure to essential utilities and telecommunications infrastructure. Key names include Asian Pay Television Trust, Keppel Infrastructure Trust, and NetLink NBN Trust.

Asian Pay Television Trust: Trading at SGD0.084 with a market cap of SGD151.7m, this trust benefits from niche media infrastructure assets. While its DPU metrics are not reported, its yield and asset quality contribute to steady performance.
Keppel Infrastructure Trust: At a trading price of SGD0.440 with a market cap of SGD2,676.7m, it posts a DPU of 4.00 cents (current). Its strong yield outlook and substantial infrastructure footprint make it a notable player.
NetLink NBN Trust: Trading at SGD0.855 with a market cap of SGD3,331.9m, it reports DPUs of 5.30 (current) and 5.40 (forward) cents. Its stable distribution coupled with a focus on network infrastructure earns it high marks among investors.

Ports & Shipping Business Trusts

In the ports and shipping sector, First Ship Lease Trust and Hutchison Port Holdings offer exposure to maritime transport and logistics.

First Ship Lease Trust: Trading at SGD0.043 with a market cap of SGD76.0m, it focuses on ship leasing with limited distribution data but has shown modest returns with yields reflecting its niche asset base.
Hutchison Port Holdings: Priced at USD0.165 with a market cap of USD1,437.3m, this trust targets port and shipping operations with DPUs of 1.58 (current) and 1.67 (forward) cents. With a stable yield profile, it is a dependable component of a diversified infrastructure portfolio.

Distribution & Yield Highlights

The report includes an extensive distribution calendar, highlighting upcoming payout dates across the REIT spectrum. For example, OUE REIT’s SGD0.200 distribution (announced on 23 January 2025, payable on 5 March 2025) and CapitaLand Ascendas REIT’s SGD1.029 distribution (announced on 6 February 2025, payable on 11 March 2025) underscore the emphasis on reliable, periodic income. Each REIT and Business Trust maintains well-defined ex-date, record date, and pay date schedules to ensure transparency and consistency in investor returns.

Geographical Portfolio Breakdown

A further dimension to the analysis is provided by the detailed geographical breakdown of assets. Office, retail, industrial, hospitality, healthcare, and data centre portfolios are diversified across markets spanning Singapore, Hong Kong, China, the rest of Asia, Australia & New Zealand, the United Kingdom, Europe, and the United States. This distribution offers investors a clear insight into regional exposure. For instance, office REITs average 82% exposure to Singapore, while companies like Manulife US REIT, Keppel Pacific Oak US REIT, and Prime US REIT are almost entirely based in the United States. Retail and industrial trusts, on the other hand, combine strong local roots with select exposures to key global markets.

Methodology & Final Thoughts

The research adopts a rigorous approach by analysing key metrics such as current and forward DPUs, yield percentages, debt-to-asset ratios, and price-to-book multiples. In determining ratings, the investment research team classifies total expected returns over a 12-month horizon – BUY ratings typically signify expected returns in excess of 10% (or, for smaller market cap companies, above 30%). HOLD ratings imply more moderate scenarios while SELL ratings are reserved for those below market expectations.

Overall, the report underscores a clear preference for REITs supported by robust asset quality, healthy financial positions, and strong sponsor backing. It also highlights the dynamic market environment where supply challenges, rental consolidation, and evolving risk parameters shape dividend forecasts and fair value estimates.

Conclusion

This deep dive into the S-REITS and Business Trusts universe reveals a meticulously balanced landscape. With strategic recommendations spanning BUY to HOLD, the report provides investors with actionable insights into key players across office, retail, industrial, hospitality, healthcare, data centre, and niche sectors such as ports and infrastructure trusts. OCBC Investment Research Private Limited’s comprehensive analysis affirms that disciplined payout strategies, geographical diversification, and evolving market trends are at the forefront of investment decisions in Singapore’s real estate space.

“Top Insights on S-REITs Performance, Sector Updates, and Investment Trends – March 2025”