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Mapletree Logistics Trust logged highest retail net inflows among S-REITs in 1Q2024

Jovi Ho
·4-min read

MPACT and Keppel DC REIT, at second and third place, were neck and neck at $54.6 million and $54.3 million respectively.

Mapletree Logistics Trust M44U (MLT) saw the highest amount of net inflows from retail investors among S-REITs in 1Q2024, at some $119 million, more than twice the amount that went into runner-up Mapletree Pan Asia Commercial Trust N2iu (MPACT).

In a May 17 report, digital wealth management platform Syfe listed the eight S-REITs that saw the highest retail net inflows in the first quarter, citing data from the Singapore Exchange S68 (SGX) and Bloomberg.

MPACT and Keppel DC REITAJBU, at second and third place, were neck and neck at $54.6 million and $54.3 million respectively.

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Mapletree’s three REITs, which also includes Mapletree Industrial Trust Me8u (MIT), report with a March financial year-end. MIT and MPACT reported y-o-y increases in distribution per unit (DPU) for 4QFY2024 ended March 31.

MLT, however, reported a y-o-y decline in 4QFY2024 despite divestment gains. All three REITs reported y-o-y DPU declines in FY2024.

Granted, the trading data till March 27 occurred prior to the release of the REIT’s results for FY2024 ended March 31.

In a cover story published earlier this month, The Edge Singapore noted that MLT has been hit by foreign exchange losses. Ng Kiat, CEO of MLT’s manager, said: “Without forex, our revenue [in FY2024] would have risen by 3.6% but it rose by 1.2% instead. That was the main factor to hit our topline.”

Additionally, MLT reported a negative $470 million impact on its FY2024 portfolio valuation due to forex movements.

MLT is actively recycling its assets. On May 10, its manager announced it had sold a warehouse at Tuas for $10.5 million, 10.5% above the property's valuation of $9.5 million as at March. Following the divestment, MLT’s portfolio will consist of 187 properties.

Looking ahead, Ng’s has indicated that DPU growth is likely to be negative. “We announced our first DPU decline for MLT. We are one of the last few REITs to have managed to maintain positive DPU but we cannot fight against macro-economic trends of forex weakening and the higher interest rate environment,” she says. “Headwinds of forex weakness, higher interest rates and China will continue to hit us.”

Latter leaderboard

CapitaLand Ascendas REIT A17U (CLAR), meanwhile, placed fourth at $50.7 million in retail net inflows in 1Q2024.

The latter half of the leaderboard saw lower retail net inflows during the quarter; Frasers Logistics & Commercial Trust Buou, in fifth place, logged $30.4 million.

CapitaLand China Trust AU8U and CapitaLand Ascott Trust Hmn logged $27.3 million and $24.1 million respectively.

Finally, Suntec REIT T82U saw $22.4 million of retail net inflows in the first quarter.

Singapore REITs have had a tough start in 2024, says Syfe. “The expectation that the Fed may delay rate cuts has weighed on sentiments toward S-REITs. However, retail investors have continued to add to S-REITs, taking advantage of below long-term average valuations and attractive yields.”

Contrary to the widespread pessimism in the market, however, Syfe thinks S-REIT’s operations have stayed resilient in 1Q2024. “Most S-REITs, in the latest quarterly results or latest available results, have shown signs of healthy occupancy rates and rental revision. For instance, MPACT not only maintained high portfolio occupancy but also improved the rate to 96.1%, thanks to proactive management efforts. CLAR also maintained a healthy occupancy rate at 94.2%, leading to positive rental reversion of 13.4%.”

Overall, Syfe thinks S-REITs are undervalued. “Currently, S-REITs are trading at attractive valuations, with price-to-book ratio of the iEdge S-REIT Index at 0.85 times, nearly 20% below its longer-term average. The 12-month dividend yield is close to a healthy 6%.”

Syfe REIT+ rebalancing

Syfe replaced Starhill Global REIT with OUE REIT in its Syfe REIT+ portfolio as part of a semi-annual rebalancing that was completed on March 28.

The Syfe REIT+ portfolio tracks the iEdge S-REIT Leaders Index, which is also rebalanced twice a year.

In an email to users on April 2, Syfe said OUE REIT was added to the iEdge S-REIT Leaders Index “due to its improved liquidity”, and the Syfe REIT+ portfolio had followed suit.

Meanwhile, Syfe dropped Starhill Global REIT from its 20-strong portfolio as the Singapore-listed REIT possesses the lowest new weighting in the iEdge S-REIT Leaders Index.

CapitaLand Integrated Commercial Trust C38U remains the largest constituent in the Syfe REIT+ portfolio, at 10.01%; while CLAR remains in second place with a 9.99% weightage.

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