Asia Pacific REITs Outshine Equities in September
Australia REITs Led Declines in Asia Pacific on Victoria Lockdown; Taiwan Climbs
By Patrick Ma, Director, Listed Products and Research
October 5, 2020 – Asia Pacific’s top-100 most-traded REITs outperformed their equity counterparts in September as stock markets around the world fell during the month. Despite a downward trend with a decline of 1.5% in September, equities performed worse with a 2.2% drop.
Most countries’ REIT sector outperformed their respective equity market, except for Japan, where the country’s REITs saw a 0.6% drop, underperforming the country’s equity market, which returned 1.1%.
Large REITs such as Nippon Building Fund and Japan Real Estate Investment led the fall. Australia REITs, meanwhile, were the worst performers in the region with a 4% decline. The dismal performance was led by major retail REITs such as Scentre Group and Vicinity Centres, on concerns about the economic impact of the COVID-19 pandemic and especially from the Victoria lockdown.
Fraser Centrepoint dropped 5%, Maple Industrial Trust Up 5%
In Singapore, Fraser Centrepoint Trust dropped 5% this month. The REIT announced an SG$1.33 billion equity fundraising at SG$2.34 (US$1.71) per unit, a 7% discount a previous close on September 25, to finance the acquisition of the remaining 63% stake in Asia Retail Fund (a portfolio of Singapore suburban malls) from its sponsor Frasers Property. On the other hand, Mapletree Industrial Trust rose 5% this month, as the REIT announced another US$204 million acquisition of US data centres.
Looking forward, the global capital market is expected to enter a volatile period as investors focused on the US presidential election and the uncertainty of its outcome. While China’s economy has continued to rebound from COVID-19 pandemic lows, there have not been strong spill-over effects to the other economies in the Asia Pacific region, and challenges for a strong recovery in 2021 will remain. Against an uncertain geopolitical and economic backdrop, Asia Pacific REITs will continue to be attractive as defensive plays.
REIT Index | Corresponding equity index | ||||
| Sep 2020 | YTD-2020 |
| Sep 2020 | YTD-2020 |
GPR 250 REIT Index | -3.2% | -19.6% | MSCI WORLD | -3.4% | 2.1% |
GPR Aprea Investable REIT 100 Index | -1.5% | -13.1% | MSCI AC ASIA PACIFIC | -2.2% | 0.7% |
GPR Aprea Investable REIT Australia | -4.0% | -16.9% | MSCI Australia | -6.8% | -11.4% |
GPR Aprea Investable REIT Japan | -0.6% | -14.3% | MSCI Japan | 1.1% | -0.3% |
GPR Aprea Investable REIT Singapore | -0.2% | -5.7% | MSCI Singapore | -3.1% | -22.1% |
GPR Aprea Composite REIT Index Hong Kong | -2.1% | -22.5% | MSCI Hong Kong | -5.1% | -8.3% |
Based on market close at September 30, 2020 |
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All performance numbers are based on total gross returns in USD |
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Sources: GPR and Bloomberg |
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