Thursday, March 30, 2017

Commercial S-REITs Rate-Hike Sensitivity Data Comparison (4Q2016)

During bullish times, it is still important to keep a 'shopping list' for our portfolios. Even though valuations might be too high for us to deploy capital at the moment, we should continue to grow our investable funds (warchest) while waiting for opportunities during market dips. It is common knowledge that REITs is an asset class that is more sensitive to Fed rate hikes. With a widely-expected rate hike coming in June, we should get our 'shopping list' ready because those dips after rate hikes are usually short-lived.

Below is a short-list of blue-chip commercial S-REITs based on their latest quarterly results for your easy comparison. When the market dips come (and they will eventually), all of us can strike fast. Happy reading! :)


Mapletree Commercial Trust:
1. Gearing: 37%
2. Debt Maturity: 4.3 years
3. Debt Maturity Profile: No refinancing needs in FY16/17 & FY2017/2018
4. Interest Coverage: 4.9 times
5. All-in debt costs: 2.64% per annum
6. % of borrowings hedged on fixed rates: 81.2%
7. NAV: $1.34


Suntec REIT:
1. Gearing: 37.7%
2. Debt Maturity: 2.91 years
3. Debt Maturity Profile at the REIT level: 2017 (3.4%), 2018 (34%), 2018 (27.2%)
4. Interest Coverage: 4 times
5. All-in debt costs: 2.28%
6. % of borrowings hedged on fixed rates: 60%
7. NAV: $2.12


CapitaLand Commercial Trust:
1. Gearing: 37.8%
2. Debt Maturity: 3.2 years
3. Debt Maturity Profile: 2017 (5%), 2018 (16%), 2019 (21%), 2020 (38%), 2021 (15%)
4. Interest Coverage: 5.8 times
5. All-in debt costs: 2.6%
6. % of borrowings hedged on fixed rates: 80%
7. NAV: $1.78

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