Market Analysis

NOVEMBER 202O

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

Asia Pacific REITs, as indicated by the performance of the top-100 most traded REITs in the region, rose 9.8% in November, reversing October’s decline, However, REITs are still behind Asia Pacific equities in terms of performance as the latter gained 11.5% during the same period. 

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By Jeroen Vreeker, Index Analyst for Global Property Research

Asia Pacific REITs, as represented by the GPR/APREA Composite REIT Index, ended up 9.7% higher in November 2020 on reports of successful vaccine trials and hopes that many or most parts of the economy will return to pre-Covid 9 pandemic conditions in the coming months. 

The GPR/APREA Composite REIT Index moved in line with regional equities that were 10.2% up. 

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OCTOBER 202O

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

Asia Pacific REITs dropped 4.4% in October and lagged behind Asia Pacific equities. Among individual REIT markets in the region, Singapore REITs were the worst performers.

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By Jeroen Vreeker, Index Analyst for Global Property Research

The coronavirus pandemic continued to impact the total return performance for Asia Pacific REITs in October. Ultimately, the GPR/APREA Composite REIT Index finished 4.2% lower, underperforming regional equities, which were up 1%. 

Taiwan and China were the only REIT jurisdictions that managed to stay in the positive territory during the month.

 

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SEPTEMBER 202O

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

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%.

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By Jeroen Vreeker, Index Analyst for Global Property Research

The Asia Pacific GPR/APREA Composite REIT index closed the third quarter 7.2% higher, after a  a 1.4% loss in September 2020.

Looking at the sector performances, Hotel (2.5%) and HealthCare (1.3%) were the only ones up during the month. 

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AUGUST 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

Looking at the sector performances, Industrial — a clear outperformer in the preceding month with a 15.1% gain —was now in negative territory (-1.4%). 

Hotel (15.9%) turned out to be the best performing sector carve-out ahead of Retail (9.2%) and Office (7.4%)

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

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. 

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JUly 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

The industrial sector’s outperformance boosted the regional REITs. They did not, however, manage to outperform local equities which added 4.6%. 

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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Overall gains in the market were underpinned by positive sentiment over low-interest rates and a weakening US dollar. However, REITs’ advances still lagged regional equities, which climbed 3.4%.

Looking forward, a weak USD and low-interest rate expectations will underpin the future performance of Asia Pacific REITs. 

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JUNE 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

Among the hotel gainers in the month was Jinmao Hotel Investments and Management, which had proposed on June 19 a privatization of the company by way of a scheme of arrangement. 

However, healthcare, office and residential sectors posted losses during the month. 

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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

AsiaPac REITs rose on the gradual relaxations of lockdowns as well as indications that the COVID-19 pandemic is seeing signs of stabilising. Some economies have also re-opened their borders with the creation of “travelling bubbles” between countries. However, AsiaPac REITs’ performance still lagged those of equities as markets’ appetite for risk rose. As we look forward, we expect Asia Pacific REITs to benefit from the gradually re-opening of the region’s economies. 

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MAY 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

Asia Pacific REITs were up 4.8% in May 2020, adding onto the 7.3% gain realised in the preceding month. Looking at sector performances, the industrial sector gained the most, up 10.2% in the month. Hotel was next with a 9.3% increase. Residential was up 8.5%, retail gained 1% and healthcare climbed 4.3%.

While the industrial sector continues to see demand due to a more prominent e-commerce trend during the lockdown period in most regions, some hotels in Asia Pacific have also started to re-open.

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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

In May, REITs in Japan, Australia, and Singapore registered healthy gains, while Hong Kong REITs dropped 14% and underperformed local equities.

The China National People’s Congress passed the National Security Law for Hong Kong on May 28. While details of the law remained vague, it has already sparked a backlash from the U.S., which has said it plans to terminate its special economic and trading relationship with the territory. As the territory risks losing its autonomous status with China, market concerns over the outlook for Hong Kong and its property market have risen.

Hong Kong REITs’ losses were more than offset by gains in the other regions. 

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APRIL 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

Gains were recorded across all sectors during the month.

Asia Pacific REITs recovered from the heavy losses seen in the previous month, with the hotel sector staging a strong comeback, followed by retail REITs.

Gains for other sectors ranged from 0.2% to 15%, with the office sector showing the least gains. However, the regional REITs underperformed equities, which climbed 8.2% during the month.

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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Australia and Singapore REITs outperformed their countries’ equities.

The GPR/APREA Investable REIT Index reported a 7% increase in April after the coronavirus pandemic showed signs of peaking. Aggressive fiscal and monetary responses from governments and central banks around the world as well as early signs of the discovery of drugs against the virus also contributed to the gains.

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MARCH 202O

By Jeroen Vreeker, Index Analyst for Global Property Research

Across all sectors in the region, Hotel REITs performed the worst, followed by retail

The coronavirus pandemic impact is felt widely, putting all sectors in the GPR/APREA Composite REIT Index into the negative territory in March. The hotel sector was the worst hit, leaving it 39.8% down compared to last year’s performance. 

Hotels in the region were affected by falling occupancy rates and revenue per available room (RevPAR) due to lockdowns and travel bans across the world. 

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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Markets to remain volatile for the coming months with news flow driving sentiment.

Overall, the GPR/APREA Investable REIT Index reported a 24% decrease in February versus MSCI AC Asia Pacific’s 12% decrease over the same period. Similar to global REITs, the COVID-19 pandemic hit Asia Pacific REITs particularly hard, with the retail and hospitality sectors being the most affected. Despite the prospects of lower global interest rates and simulative fiscal policies, the markets focused on the weakness of the global economy, with disruption to tourism and trade affecting REITs’ rental outlook.

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FEBRUARY 202O

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Global equity markets have been hit hard by heightened concerns about the impact of the coronavirus outbreak, as the situation escalated in mainland China and spread to more than 60 countries in February.

But REITs in Australia, Japan and Singapore were relatively resilient in February, outperforming general equities by 2.5%, 1.2% and 0.2%, respectively.

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By Jeroen Vreeker, Index Analyst for Global Property Research

Fears over the coronavirus triggered a sharp fall (-7.3%) in the share prices of Asia Pacific REITs in the last week of February 2020.

Ultimately, the GPR/APREA Composite REIT Index closed the month 7.5% down with at country level only Taiwan (1.4%) and Malaysia (1.1%) in positive territory. The regional REITs underperformed the regional equities that only lost 6.0%.

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JANUARY 202O

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Global equity markets had a dismal start to the year.

The 2019-nCoV has hit Asia particular hard, as China’s lockdown affected tourism, transportation, and supply chains. Asia Pacific REITs’ outperformance reflected investors’ preference for defensive plays and REITs’ resilience at a time of uncertainty.

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By Jeroen Vreeker, Index Analyst for Global Property Research

Retail, Hotel sectors down but Diversified and Industrials gain.

A comparative analysis for the GPR/APREA Composite REIT Index showed that the regional REITs returned a 1.8% total return performance in USD terms in January 2020, outperforming the regional equities that contracted 2.8%.

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december 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Geopolitical tensions could support REIT performance in 2020 as investors seek defensive plays

For most of 2019, global REITs underperformed global equity markets as healthy U.S. economic growth and a benign interest rate environment supported stock investments. But in Asia Pacific, REITs outperformed equities.

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By Jeroen Vreeker, Global Property Research

The Asia Pacific listed property sector ended 2019 with a total return performance growth of 22.8%, despite losing 0.5% in USD terms in the last month of the year, a comparative analysis for the GPR/APREA Composite REIT Index showed.

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NOVEMBER 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Global equity markets continued to rally in November, helped by the U.S. Fed’s rate cut in end-October and a potential interim tariff agreement between China and the U.S. The agreement signalled a more stable Sino-U.S. relationship.

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By Jeroen Vreeker, Global Property Research

Asia Pacific REITs took a pause on their six-month winning streak to post a 1.2% loss in USD terms in November. REITs, again, underperformed equities with the comparable MSCI AC Asia Pacific Index registering a 0.5% growth.

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OCTOBER 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

The global capital markets continued to rally in October, helped by progress in the China-U.S. trade talks and expectations of further interest rate cuts.  During the month, the U.S. agreed to suspend its next tariff hike on Chinese imports with plans to sign an interim trade agreement with China in November. The Fed also cut its policy rate by 25 basis points at its October FOMC (Federal Open Market Committee) meeting.The MSCI World Index rose 2.6% in the month.

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By Jeroen Vreeker, Global Property Research

Asia Pacific REITs posted their sixth consecutive monthly gain in USD terms. As at 31 October 2019, REITs in the region advanced 2.7%. However, they still underperformed equities with the comparable MSCI AC Asia Pacific Index up 4.4%. With no additions and deletions throughout the month, the GPR/APREA Composite REIT Index continued to cover 167 Asia Pacific REITs as at 31 October 2019.

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SEPTEMBER 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Global capital markets cheered after the U.S. Fed cut its benchmark rate by 25 basis points (bps) and trade talks between China and the U.S. showed signs of progress. Asia Pacific REITs’ outperformance is expected to return in October on the back of concerns over the global economic outlook and lower interest rate expectations.

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By Jeroen Vreeker, Global Property Research

All countries, except for Australia, advanced in the GPR/APREA Composite REIT Index, supporting overall gain for the region. Best performers were Taiwan, Thailand and Japan.

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AUGUST 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

The sentiment for global capital markets deteriorated in August. The U.S. 30-year treasury bond yield fell bellow 2% for the first time. Meanwhile, the negative yield curve for Germany signalled weakness in the EU economy. These helped contribtue to Asia Pacific REITs’ outperformance against equities. 

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By Jeroen Vreeker, Index Analyst for Global Property Research

Asia Pacific REITs were up 1.8% in August and outperformed equities during the period, according to Global Property Research. Hong Kong REIT index incurred the largest decline of 9.1% due to anti-extradition bill protests, while Thailand posted a solid gain of 10.3% in August.

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JUly 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

The global geopolitical environment improved in July after the U.S. resumed trade talks with China and moderated its sanctions against Huawei. These events bolstered market sentiment. The MSCI World rose 0.5% in July after a 6.6% jump in June. But challenges are seen ahead.

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By Jeroen Vreeker, Index Analyst, Global Property Research

The aggregate gain for the GPR/APREA Composite REIT Index was predominantly attributable to the increases recorded in Japan (3.6%), Malaysia (1.3%), China (0.9%) and Australia (0.6%). At the other end of the spectrum, there were contractions in Taiwan (-0.7%), Singapore (-1.4%), Thailand (-2.8%), and most specifically Hong Kong (-6.0%).

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JUNE 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Market expectations for a U.S. rate cut and an improvement in Sino-US trade relation helped fuel June’s rebound for equity markets, leading to underperformance of Asia Pacific REITs.

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By Jeroen Vreeker, Index Analyst, Global Property Research

Asia Pacific REITs advanced 4.8% in USD terms in June and underperformed equities with the comparable MSCI AC Asia Pacific Index returning 5.4%. As a result, the GPR/APREA Composite REIT Index ended the second quarter 5.4% higher. This quarterly increase followed a 11.6% jump in Q1 2019.The table below shows the total return performances realised in the previous month for the various currencies available for the GPR/APREA Composite REIT Index.

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MAY 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

In May, geopolitics became a key concern dictating the global economic growth outlook. The trade war between the U.S. and China has worsened following a breakdown in tariff talks and a decision by the U.S. to put China’s Huawei on a trade blacklist. A “new Cold War” between the two economic powerhouses has emerged as both sides implemented new tariffs.

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By Jeroen Vreeker, Index Analyst, Global Property Research

With no additions nor deletions throughout the month, the GPR/APREA Composite REIT Index continued to cover 164 Asia Pacific REITs as at 31 May 2019. Asia Pacific REITs advanced 2.2% in USD terms and as such clearly outperformed equities with the comparable MSCI AC Asia Pacific Index contracting 5.8%.

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APRIL 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Given the current policy environment, we may see cooling equity markets and a risk-off mode ahead, which will be supportive for the Asia Pacific REITs’ performance in the mid- to long-term.

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By Jeroen Vreeker, Index Analyst, Global Property Research

Asia Pacific REITs contracted 1.6% in USD terms and underperformed equities, with the comparable MSCI AC Asia Pacific Index adding 1.6%.

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MARCH 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

A concerted effort by governments and central banks to maintain growth through easier monetary and fiscal policies have helped to bolster Asia Pacific REIT’s performance in March.

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By Jeroen Vreeker, Index Analyst, Global Property Research

Asia Pacific REITs advanced 4.1% in USD terms and outperformed equities with the comparable MSCI AC Asia Pacific Index returning 1.3%. As a result, the GPR/APREA Composite REIT Index ended the first quarter 11.6% higher.

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FEBRUARY 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Asia Pacific REITs have underperformed the region’s equity indices in February, with the GPR/APREA Investable REIT Index reporting -0.4%, compared to MSCI Asia Pacific’s +1.4%. On a year-to-date basis, Asia Pacific’s REITs have also underperformed the region’s equity indices.

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By Jeroen Vreeker, Index Analyst, Global Property Research

Further to the removal of Dolmen City REIT (Pakistan) that no longer met the size criteria, the comprehensive GPR/APREA Composite REIT Index covered 165 Asia Pacific REITs as at 28 February 2019. In February, Asia Pacific REITs lost 0.3% in USD terms, underperforming equities, with the comparable MSCI AC Asia Pacific Index adding 1.4%.

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JANUARY 2019

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

The year 2019 started with a surprise stock market rally across the world, with the MSCI World reported an 8% gain for January. The markets have discounted most of the negative news about slower economic growth and global geopolitical issues. Instead, participants have focused on expectations of a slower pace of increases in U.S. interest rates and a possible reversal of the Fed policy stance.

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By Jeroen Vreeker, Index Analyst, Global Property Research

The comprehensive GPR/APREA Composite REIT Index, which covered 166 Asia Pacific REITs as at 31 January 2019, recorded a 7.5% gain in USD terms, and as such outperformed the broader equities with the comparable MSCI AC Asia Pacific Index adding 6.8%.

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