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Chart of the Week: Mapletree Commercial Trust the King of STI REITs

Tim Phillips
Singapore CBD investing dividends

The addition of Mapletree Commercial Trust (SGX: N2IU), or MCT, to Singapore’s Straits Times Index (SGX: ^STI) – set to take place in late September – was officially announced earlier this week. Surprisingly, given the dominance of REITs in the Singapore stock market, it will only be the fourth REIT to form part of the benchmark index and will replace the champion of shareholder value destruction; Hutchison Port Holdings Trust (SGX: NS8U).

The other three REITs; Ascendas Real Estate Investment Trust (SGX: A17U), CapitaLand Commercial Trust (SGX: C61U) and CapitaLand Mall Trust (SGX: C38U) are all giants in their own right. Yet, it’s MCT that has outpaced them, not only in 2019 but also over the longer term.

Looking at MCT’s five-year returns below versus the other three STI REITs, its unit price has rarely been an underperformer and it really started to pull away from the pack earlier this year. Over the past five years it has given investors a solid price return of 54%, with the next-best performer’s units (Ascendas) being a distant second – and a full 17 percentage points behind – with a return of 37%.

It’s perhaps indicative of the quality, and importance, of the parent sponsor when you look at REITs. The Mapletree stable of listed REITs has always been well-regarded given the combination of their quality assets, solid acquisition track record, growing payouts, long-term strategy, and responsible capital management. It wouldn’t be a surprise if MCT continues to outperform the other STI REITs for the rest of the year and beyond.

Mapletree Commercial Trust outperform REITs

Source: CapIQ as of 13 September 2019

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Tim Phillips owns shares in CapitaLand Mall Trust. The Motley Fool Singapore has recommended the shares of Mapletree Commercial Trust, Ascendas REIT, CapitaLand Commercial Trust and CapitaLand Mall Trust.

Motley Fool Singapore 2019