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Asia Pacific REITs underperform regional equities in January-March period

Asia Pacific REITs underperform regional equities in January-March period

By Jeroen Vreeker, Managing Director at Global Property Research

Office and retail were the worst performers in the first quarter

The GPR/APREA Composite REIT Index’s 2.3% decline in March 2023 brought the total return performance for the first quarter to -1.9%. Although Asia Pacific REITs started the calendar year in the black (5.1%), but this reversed in February 2023 (-4.5%) and March 2023 (-2.3%).

Malaysia (1.4%), Singapore (1.0%) and Taiwan (0.5%) managed to eke out a gain last month while Australia (-6.8%) was the worst performer in March 2023.

The table below shows the total return performances realized in the previous month and in the first quarter for the various currencies available for the GPR/APREA Composite REIT Index.

GPR/APREA Composite REIT Index (March)-4.6%-4.5%-3.3%-2.3%
GPR/APREA Composite REIT Index (1Q)-3.7%-1.1%-1.4%-1.9%

There was little refuge to be found in sectors, with Residential (0.3%) gaining in March 2023 and Industrial (0.8%) in the January-March period:

GPR/APREA Composite REIT Index(March)-0.7%-3.9%-1.7%-0.8%-3.5%n/a0.3%-4.1%
GPR/APREA Composite REIT Index(1Q)-0.6%-1.2%-0.6%0.8%-4.6%n/a-0.4%-4.9%

The comprehensive GPR/APREA Composite REIT Index covered 184 Asia Pacific REITs with a combined free float market capitalization of USD 268.7bn as at 31 March 2023. Following the latest quarterly rebalancing of the GPR/APREA index series, which took effect on 20 March 2023 start of trading, BHG Retail REIT (classified to China) and RL Commercial REIT (Philippines) were added to the GPR/APREA Composite REIT Index.

USD-denominated data as per 31 March 2023

The best-performing REITs were Mindspace Business Parks REIT (IND: 12.6%), Ichigo Office REIT Investment Corporation (JPN; 11.8%), China Merchants Commercial REIT (CHN; 6.7%), Mapletree Pan Asia Commercial Trust (SGP; 6.0%) and Keppel DC REIT (SGP; 5.3%). The worst performances came from Lippo Malls Indonesia Retail Trust (IDN; -35.3%), Digital Core REIT (SGP; -27.0%), Manulife US REIT (SGP; -20.4%), CPN Retail Growth Leasehold REIT (THA; -20.4%), and Prime US REIT (SGP; -20.0%).