Australian REITs Outperformed In August, Japan Flat, Singapore Fell

Overall, AsiaPac top-100 most traded REITs held their ground even as some Chinese stocks fell

By Patrick Ma, Director, Listed Products and Research, Admiral Investment Limited

September 3, 2021 – While some Chinese stocks, especially those listed in the US and Hong Kong, experienced sharp declines in August, Asia Pacific’s top-100 most-traded REITs gained 0.8%.

Australia is the strongest performing country in August. Australia’s direct property market has been strong for several months, and as a result, selected property types are seeing cap rate compressions, which influenced REITs’ valuations.  

Singapore REITs, on the other hand, showed the weakest performance in August.  The republic’s REIT market was also the worst-performing so far in 2021. Singapore REITs have had a stellar record as a financing and funding marketplace, with the sector raising $4.5 billion (US$3.35 million) in 2020.  It is also a primary REIT market with significant international exposure. Over 80% of S-REITs have either some or entirely overseas assets. Thus, there seemed to be continued investor support for the sector even if its recent performance was relatively weaker than other markets. 

Japan is the second-best performing REIT market after Hong Kong year-to-date. However, its performance in August was little changed after the Olympics.  The Tokyo Olympics was held under exceptional circumstances, with a restricted guest list and virtually no tourists. As a result, there was hardly an Olympic retail or hospitality boom in the second quarter. However, Japan’s economy did crawl back to growth in the second quarter of 2021, but the rebound remained weak, compared to the developed economies such as the US and the UK, because of a sudden rise in Covid-19 cases.