Retail and Hospitality REITs Performed Worst In Asia Pacific In 2020

January 22, 2021 – The worst performers in the Asia Pacific REIT sector in 2020 were largely in the retail and hospitality sector. 

Although, First REIT — the worst performing REIT — is in the healthcare sector. It posted a 74.12% decline compared to 2019. First REIT is restructuring its 11 master lease agreements (MLA) with Lippo Karawachi (LK), which risks defaulting on its obligations. In FY2019, the 11 MLAs constituted about 72% of First REIT’s rental income. LK is an Indonesian-based homebuilder and the global economic slowdown as well as the weakness in Rupiah has affected its performance.

Australia’s US Masters Residential Property Fund was the second worst-performer with a 69.72% decline in performance. 

This is followed by Indonesia’s Lippo Malls Indonesia Retail Trust, which fell 66.88% in the year. Singapore’s ARA Hospitality Trust and Japan’s Ichigo Hotel REIT Investment Corp both posted a 46.61% decline during the period.