REAL ESTATE INVESTMENT TRUSTS (REITS)

Frasers Logistics & Commercial Trust (FLCT) emerged as the winner in the REITs sector, securing both the overall sector winner and growth in profit after tax (PAT) titles.

FLCT was formed from the merger of Frasers Logistics and Industrial Trust and the Frasers Commercial Trust in 2020.

FLCT is backed by Frasers Property Tq5, whose controlling shareholders, the Sirivadhanabhakdi family, have two other Singapore-listed REITs, Frasers Centrepoint Trust J69u and Frasers Hospitality Trust Acv, as well as beverage manufacturer Fraser and Neave and Thailand-based alcohol, drinks and foodstuff manufacturer Thai Beverage Y92.

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FLCT was listed on the Singapore Exchange S68 in June 2016 at an IPO price of 89 cents. Back then, its portfolio consisted of 51 Australian logistics properties. Since then, it has expanded its portfolio with a series of acquisitions into multiple new markets. These included Australia, Germany, the UK, Singapore and the Netherlands.

Over the years, it has spent $5 billion on accretive acquisitions. It has also been rebalancing its portfolio by diversifying some $1.5 billion worth of assets at a premium to their respective book values. Its portfolio now consists of 107 properties valued at $6.9 billion, the bulk of which are 99 logistics and industrial properties and eight commercial properties with a total lettable area of 2.7 million sqm.

With strong connectivity to key infrastructure, FLCT’s modern portfolio consists predominantly of freehold and long-leasehold land tenure assets with a well-diversified tenant base.

With its portfolio of logistics assets, FLCT was in a good position to capture growth in demand for such assets during the pandemic. In the three years under consideration for this year’s Billion Dollar Club (BDC), FLCT achieved PAT growth at 27.8% CAGR.

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Separately, CDL Hospitality Trusts J85 (CDLHT) won the returns to shareholders category for the REIT sector with a CAGR of 14.2% in shareholder returns in the three years under consideration for this year’s BDC.

CDLHT, backed by City Developments, is a leading regional hospitality trust that was listed in July 2006. It consists of CDL Hospitality Real Estate Investment Trust, a real estate investment trust, and CDL Hospitality Business Trust, a business trust.

As at June 30, CDLHT held assets under management of about $3.1 billion. Its portfolio comprises 19 operational properties (including 4,820 rooms and a retail mall) and one build-to-rent project with 352 apartment units in the pipeline. The Singapore hotels under CDLHT include the Grand Copthorne Waterfront Hotel, M Hotel and W Singapore-Sentosa Cove.

Like the entire hospitality industry, CDLHT was hit by the pandemic but bounced back strongly.

CapitaLand India Trust (CLINT), one of the REITs belonging to CapitaLand Investment, was named the winner for the weighted return on equity (ROE) category among its REIT peers. For the three years under consideration in this year’s BDC, it generated a weighted ROE CAGR of 8.1%. CLINT, formerly Ascendas India Trust, was listed in August 2007 as the first Indian property trust in Asia. Its principal objective is to own income-producing real estate used primarily as business space in India.

Significantly different from many other REITs, CLINT is active in developing and acquiring land or uncompleted developments to be used as business space and held after completion. In contrast, many REITs prefer to buy mature assets.

CLINT’s portfolio includes nine IT business parks, one logistics park, one industrial facility and four data centre developments in India, with a total completed floor area of 19.2 million sq ft spread across Bangalore, Chennai, Hyderabad, Pune and Mumbai. As at May 12, CLINT’s assets under management stood at $2.7 billion.