Australia REITs Outperformed Equities As Stockland, Vicinity Take Lead
Singapore industrial REITs such as Mapletree Industrial Trust and Ascendas REIT declined over 6% during the month.
By Patrick Ma, Director, Listed Products and Research
September 4, 2020 – Asia Pacific top-100 most invested REITs rose 5.9% in August, outperforming regional general equities. Most Asia Pacific REITs continued to record positive price performance as investors widely regarded the worst of the pandemic to be over, allowing for economies in the region to recover.
The strong performance by Asia Pacific REITs was mostly driven by Australian REITs, which jumped 10.7% during the month, outperforming a 5.6% gain in local equities. The major outperformers were Stockland, Vicinity Centres, and Scentre Group, as investors expected a rebound in consumption that would help boost the retail sector.
In Japan, hospitality REITs such as Japan Hotel REIT and Invincible REIT led the rally, followed by retail and office. Meanwhile, logistics REITs came under selling pressure. Singapore REIT market showed similar investment patterns, with CDL Hospitality REIT, Mapletree Commercial Trust, and Mapletree North Asia Commercial Trust taking the lead. Industrial REITs such as Mapletree Industrial Trust and Ascendas REIT declined over 6% during the month.
Looking ahead, Asia Pacific REITs are expected to continue to show strong performance against a favourable macroeconomic backdrop. The recent statement by Fed chairman Powell about targeting inflation on a long-term average basis suggests a continuation of “lower-for-longer” interest rate outlook, which is positive for asset prices. Asia Pacific has also seen increased capital flows in recent weeks, both into the stock market and the real estate market.