REITs can be distinguished by property types and geographical location. Currently there are 5 main property types for SREITs, namely healthcare, retail, office, industrial, and hospitality. Geographical location wise, most of the SREITs are Singapore-centric, and some have regional exposure mainly in the asia pacific region.
Different property types and geographical location also mean different level of risk. The risk level will in turn translate to the stock price volatility of the REIT. The higher the risk, the stock price will usually be more volatile, i.e. high beta. Following is the general ranking of the risk level of REITs by property types, based mainly on the volatility of its rental income and how much it is correlated to the business cycle (From the highest to lowest in risk level):
1) Hospitality
2) Office and Industrial
3) Retail
4) Healthcare
Hospitality Reit
Currently there are 2 listed hospitality Reit, CDL H-Trust and Ascott Reit.
The portfolio of
Ascott Reit is made up of serviced apartments. It is one of the more geographically diversified Reits, with properties in developed markets such as Singapore, Australia and Japan, and also emerging markets such as Vietnam, China, Indonesia and The Philippines.
The portfolio of
CDL H-Trust consists of hotels and one relatively small retail property, namely the Orchard Hotel Shopping Arcade. Almost all its hotels are located in Singapore, except for one in New Zealand.
In terms of property types, hospitality sector is usually deemed as the most risky because the length of stay in the properties is usually short term. We can look at the price movement of CDL H-Trust to get an idea. Despite having a relatively low gearing of 19%, since the begining of the financial crisis, its share price has dropped from above the $1.5 level all the way down to $0.415 in March 2009. Yet when market started to turn better, it was one of the best performing REIT, with its stock price going even higher than pre-Lehman level. Recently the price has broken the 52 weeks high above the $1.70 level. This really does fulfil the saying of high risk high return.
Office Reit
CapitaCommercial Trust, K-Reit Asia, and FrasersCommercial Trust are some of the listed office Reits.
The portfolio of
CapitaCommercial Trust includes mainly offices. The properties it owns directly are all in Singapore, but it does have some exposure in Malaysia through its stake in the Quill Capita Trust (“QCT”), a REIT listed in Bursa Malaysia which owns commercial properties in Malaysia.
K-Reit Asia owns offices in Singapore. Currently it does not have exposure in other countries.
The
portfolio
of
FrasersCommercial Trust includes mainly offices. The properties are located across Singapore, Australia and Japan. It also owns Alexandra Technopark, which is essentially an industrial building, albeit a high-tech one. It also has some exposure in retail properties indirectly through its stake in Allco Wholesale Property Fund, which has exposure to both office and retail sectors in Sydney.
Industrial Reit
Ascendas Reit, MapleTree Logistics Trust, Cambridge Industrial Trust and MacArthurCook Reit are the 4 listed industrial Reits.
Ascendas Reit is a pure Singapore play, with its portfolio of industrial properties such as Business and Science Parks, Logistics and Distribution Centres, and Hi-Tech Industrial buildings.
MapleTree Logistics Trust owns
mainly logistics properties. It is one of the more geographically diversified Reits with properties in 6 countries, namely Singapore, Malaysia, China, Hong Kong, Japan, and South Korea.
Cambrige Industrial Trust owns industrial properties which are all in Singapore. Its properties include warehouses, light industrial buildings, car showrooms and workshops.
MacArthurCook Industrial Reit owns industrial properties mainly in Singapore. It also has a warehouse property in Japan.
Retail Reit
CapitaMall Trust,
CapitaRetail China Trust, FrasersCentrepoint Trust, Fortune Reit, LippoMaple Indonesia Trust, and Starhill Global Reit are some of the listed retail reits.
The portfolio of
CapitaMall Trust includes mainly shopping malls in Singapore. It has some exposure to China through its 20% stake in the CapitaRetail China Trust, another listed Reit. It also has some office properties in Raffles City, etc, which forms a very small part of its overall portfolio.
The portfolio of
CapitaRetail China Trust includes shopping malls in China. As the name implies, it is a pure China play.
The portfolio of
FrasersCentrePoint Trust includes shopping malls in Singapore, mainly in the suburbs.
The portfolio of
Fortune Reit includes shopping malls in Hong Kong. It is currently still a pure Hong Kong play, though its management has expressed before its interest to expand into China.
The portfolio of
LippoMaple Indonesia Trust includes shopping malls in Indonesia.
The current portfolio of
Starhill Global Reit includes mainly shopping malls in Singapore, Japan and China. With the recently announced acquisition plan, it will be expanding its geographical reach to Australia and Malaysia, making it the most geographically diversified Retail Reit listed here. It is not called a "Global Reit" without reason. A small part of its portfolio also includes office properties, including those in Ngee Ann City and Wisma Atria.
Healthcare Reits
Currently there are 2 listed healthcare Reits, Parkway Life Reit and First Reit.
The portfolio of
Parkway Life Reit includes mainly hospitals in Singapore, namely Mount Elizerbeth, Gleneagles, and Eastshore. It also owns a number of medical facilities and nursing homes in Japan.
The portfolio of
First Reit includes mainly hospitals and a hotel in Indonesia. It also owns some nursing homes and a hospital in Singapore.
Office and Retail Reits
Suntec Reit has significant ownership of both office and retail properties. So it is difficult to classify it either as a office or a retail reit. All its properties are located in Singapore, bulk of which are located in Suntec City.
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