RHB Research 2015-07-06 (REIT): Weekly Review Report - Maintain NEUTRAL, BUY Frasers Centrepoint Trust, Starhill Global REIT, CapitaLand Mall Trust

The REITs Pulsebeat: Weekly Review Report

  • It was a mixed week for Regional REITs, with three out of eight of our tracked markets in Asia Pacific showing positive returns. 
  • The up markets, in descending order, include TH (THAI Prop Funds: +0.6% WoW), SG (S-REITs: +0.3% WoW), MY (M-REITs: +0.2% WoW). 
  • The down markets, in descending order, include JP (J-REIT: -3.7% WoW), HK (HK-REITs: -0.7% WoW), KR (K-REITs: -0.5% WoW), AU (A-REITs: - 0.2% WoW) and TW (T-REITs: -0.1% WoW). 

 On the S-REITs front

  • The Healthcare REITs outperformed +0.7% WoW, driven solely by Parkway Life REIT (+1.3% WoW), followed up by the Retail REITs which outperformed +0.6% WoW, mainly attributed by our TOP PICK Frasers Centrepoint Trust (+1.9% WoW)
  • On the flip side, the Office REITs were the worst performers, down -1.0% WoW, pulled down by Keppel REIT (-0.9% WoW) and Suntec REIT (-0.6% WoW). 
  • The other segments were mostly flat. IREIT Global REIT (+3.1% WoW) was the best performing S-REIT while Frasers Hospitality Trust (-1.8% WoW) was the worst performing S-REIT 

 Year-to-date, 

  • the Retail REITs (+5.8 % YTD) maintained the best performing sector as it surpassed the Healthcare REITs (+5.0% YTD) two weeks ago. 
  • The outperformance were mainly driven by our RHB top picks: 
  • Frasers Centrepoint Trust [BUY; TP: SGD2.22] (+10.8% YTD) and 
  • Starhill Global REIT [BUY; TP: SGD0.93] (+11.3% YTD). 
  • First REIT which was up a whopping 12% YTD and is the best performing SREIT. 
  • The Office REITs remained the biggest laggard (-8.0% YTD) dragged down by Suntec REIT (-12.2% YTD), CapitaLand Commercial Trust (-10.8% YTD) and the German office REIT - IREIT Global (-7.3% YTD). 
  • 5D ADTV at USD80m (prev. USD87m) was slightly down, but within last year’s average of SGD70-80m. 
  • With expectations high for a September Fed Funds rate “liftoff”, we think investors will stay cautious and at the sidelines for the next two months, probably until July. 


(Ong Kian Lin, Ivan Looi)

Source: http://www.rhbgroup.com/