SGX-Listed China REITs Rate-Hike Sensitivity Data Comparison (4Q2016)

Recently, horror stories have been told of 'ghost malls' in China's cities. This is hardly surprisingly given the fact that the Chinese consumers are the most obsessive online shoppers in the world. They are mostly using WeChat app for their online purchases. The e-commerce market in China has grown rapidly to become the largest in the world over the past decade. I hope these comparison data between China retail REITs can help those of you who are vested.

Mapletree Greater China Commercial Trust:
- Gearing: 40.5%
- Average debt maturity: 3.93 years
- Interest coverage ratio: 3.6 times
- All-in debt cost: 2.78%
- % of total debts hedged on fixed rates: 85%
- WALE: 2.5 years
- Occupancy: 98.6%
- NAV: $1.213

CapitaLand China Retail Trust:
- Gearing: 35.3%
- Average debt maturity: 1.84 years
- Interest coverage ratio: 6 times
- All-in debt cost: 2.81%
- % of total debts hedged on fixed rates: 53.7%
- WALE: 5 years
- Occupancy: 95.9%
- NAV: $1.60

Fortune REIT:
- Gearing: 29.5%
- Average debt maturity: 3.7 years (No refinancing needs until 2018)
- Interest coverage ratio: 4.6 times
- All-in debt cost: 2.4%
- % of total debts hedged on fixed rates: 67%
- WALE: 3.1 years
- Occupancy: 96.7%
- NAV: HK$12.90

BHG Retail REIT:
- Gearing: 31%
- Average debt maturity: 2 years
- All-in debt cost: 3.75%
- Interest rates for SGD denominated debts balanced between fixed and variable
- WALE: 5.2 years
- Occupancy: 97.6%
- NAV: $0.80

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

Dividend Warrior Portfolio Sneak Peak

A little something to whet your appetite.

 

 

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

If the Fed hike rates again in June, this is my list of quality industrial S-REITs fit for long-term holding if there is significant knee-jerk reaction in the market.

Ascendas REIT:
1.Gearing: 34.2%
2.Weighted average debt expiry: 3.8 years
3.WALE: 3.7 years (Singapore portfolio: 3.5 years Australia portfolio: 5.1 years)
4.Interest coverage: 5.3 times
5.All-in annual debt costs: 3%
6.Percentage of total borrowings hedged on fixed rates: 77.6%
7.Credit rating by Moody's: A3 Stable

Mapletree Logistics Trust:
1.Gearing: 37.6%
2.Weighted average debt expiry: 3.5 years
3.Debt maturity profile: 2017-15% 2018-16% 2019-14% 2020-17% 2021-16%
4.WALE: 4.1 years
5.Interest coverage: 5.7 times
6.All-in annual debt costs: 2.3%
7.Percentage of total borrowings hedged on fixed rates: 81%
8.Credit rating by Moody's: 'Baa1' with stable outlook

Mapletree Industrial Trust:
1.Gearing: 29%
2.Weighted average debt expiry: 3.5 years
3.Debt maturity profile: 2017-17.4% 2018-17.4% 2019-27.4% 2020-8.7% 2021-9.4%
4.WALE: 2.8 years
5.Interest coverage: 8 times
6.All-in annual debt costs: 2.6%
7.Percentage of total borrowings on fixed rates: 68.6%
8.Credit rating by Fitch: 'BBB+' with stable outlook

Frasers Logistics & Industrial Trust:
1.Gearing: 28.2%
2.Debt maturity profile: No refinancing needs in 2017 and 2018
3.WALE: 6.6 years
4.Interest coverage: 7.5 times
5.All-in annual debt costs: 2.8%

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

The local retail sector has been facing a few headwinds for the last couple of years. The increased proliferation of e-commerce, manpower shortage as well as higher operating costs have battered retailers big and small. We need experience heads to guide the malls through the stormy sea. These 4 retail REITs in my 'shopping list' have stood the test of time (so far).

Frasers CentrePoint Trust:
1. Gearing: 29.7%
2. Average Debt Maturity: 2.6 years
3. Debt Maturity Profile: 2017 (25.4%), 2018 (7.6%), 2019 (15.3%), 2020 (17.8%)
4. WALE: 1.5 years
5. Interest Coverage: 7.29 times
6. All-in debt costs: 2.1%
7. % of borrowings hedged on fixed rates: 56%
8. NAV: $1.93

CapitaLand Mall Trust:
1. Gearing: 34.8%
2. Average Debt Maturity: 5.3 years
3. WALE: 2 years
4. Interest Coverage: 4.8 times
5. All-in debt costs: 3.2%
6. NAV: $1.86

Starhill Global REIT:
1. Gearing: 35.2%
2. Average Debt Maturity: 3.1 years
3. WALE: 4.8 years
4. Interest Coverage: 4 times
5. All-in debt costs: 3.16%
6. % of borrowings on fixed rates: 99%
7. NAV: $0.92

SPH REIT:
1. Gearing: 25.7%
2. Average Debt Maturity: 2.8 years
3. WALE: 2.4 years
4. Interest Coverage: 6 times
5. All-in debt costs: 2.81%
6. % of borrowings on fixed rates: 85.9%
7. NAV: $0.94

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

Collecting rental income from hospitals and nursing homes is one of the more stable yield investment IMO. Healthcare REITs combine the best of two worlds - real estate & healthcare. With a rapidly aging population in Asia, hospitals and nursing homes will be in greater demand than ever. Parkway Life REIT is best positioned to take advantage of this demographic trend. It has the premium brand private hospitals Mount Elizabeth & Gleneagles in affluent Singapore in addition to a largely freehold portfolio of nursing homes in Japan, where adult diapers sales just overtook baby diapers in 2016.

ParkwayLife REIT:
1. Gearing: 36.3%
2. Average Debt Maturity: 3.6 years
3. Debt Maturity Profile: No long-term debt refinancing needs till FY2019
4. WALE: 8.44 years
5. Interest Coverage: 8.7 times
6. All-in debt costs: 1.4%
7. % of interest rate exposure hedged: 99%
8. NAV: $1.68

First REIT:
1. Gearing: 31.1%
2. Debt Maturity Profile: 2017 (34.2%), 2018 (35.8%), 2019 (19.8%)
3. WALE: Earliest rental renewals in 2021
4. % of debt on fixed rates: 92.3%
5. All-in debt costs: mid 3% to low 4% range
5. NAV: $1.007