CapitaLand Group is sounding the drums for Singapore’s REIT market. Asia’s largest property company has outlined a bullish blueprint to list at least $S10 billion worth of REITs on the Singapore Stock Exchange in the next three years.
At a media and analysts briefing after the listing of the $S690 million CapitaRetail China Trust, CapitaLand’s president and chief executive Liew Mun Leong said the group sees potential in the growth of the REIT market in Singapore.
Liew said the group plans to launch at least six S-REITs and the typical REIT size is expected to be valued between $S1 billion to $S1.5 billion each.
He added that in the next three to 10 years, there will be a positive REIT environment in Singapore and he only sees it going forward in the region.
Singapore currently has the third largest REIT market in the Asia region, behind Australia and Japan.
According to Pramerica Real Estate Investors, in 3Q06, the Asian REIT market saw new listings in Japan, Malaysia and Singapore and the total market capitalisation of Asian REITs reached $US51.9 billion.
In Singapore, three new S-REITs were listed in the third quarter including Fraser Centrepoint Trust (retail malls); CDL Hospitality Trust (hotels); and Cambridge Industrial REIT.
At the end of September, there were 13 listed S-REITs, with a total market cap of about $US11.1 billion.
S-REITs have also performed strongly in the 3Q06. The average dividend yield was 4%, which is 80 bps above the 10-year government bond yield of 3.2%.
Meanwhile data from Global Property Research, showed Singapore’s REIT market was the best performing country in the Asia and Oceania region in the month of November – with the highest returns of 11.7%.
Singapore’s six month total returns was 41.6% and the year to date return was 46.6%.
By Nelson Yap
