S-REITs announce their schedule for upcoming earnings season
Around three quarters of REITs & Property Trusts in Singapore have confirmed dates of release of their financial results or business updates for the respective periods ended 30 Sep 2024. Among them, 22 will report business updates and 8 will report financial results.
1. $ParkwayLife Reit(C2PU.SI)$
$ParkwayLife Reit(C2PU.SI)$ kicked off the current financial reporting season for S-REITs with the release of its third-quarter business updates last week. Gross revenue for the year-to-date 3Q24 period declined by 2.2% year-on-year, mainly due to depreciation of the Japanese yen.
However, PLife REIT’s distribution per unit (DPU) for the year-to-date 3Q24 period was 2.8% higher year-on-year at 11.30 cents. This was contributed by the hedging of exchange rates with forward contracts, and higher distributable income from Singapore hospitals and some Japanese nursing homes with step-up lease agreements.
During the quarter, PLife REIT acquired a nursing home property in Osaka for JPY2.4 billion (S$20.7 million) at approximately 9.1% below valuation, bringing PLife REIT’s Japan portfolio to 60 properties totalling approximately S$676.8 million in value.
PLife REIT continues to manage foreign exchange risks through hedging contracts and has secured long-term committed loans for pre-emptive refinancing of near-term debts. Post refinancing, the REIT has no long-term debt refinancing needs till Sep 2026.
2. $Keppel DC Reit(AJBU.SI)$
Keppel DC REIT reported higher DPU of 2.501 cents for 3Q24, a 6.1% increase quarter-on-quarter. KDCREIT also saw continued strong rental reversion, marking the 7th consecutive quarter of positive reversions, including an over 40% reversion for a major contract renewal in Singapore during 3Q24.
During the quarter, KDCREIT also made its maiden entry into Japan, with the acquisition of a hyperscaler data centre in Tokyo for JPY23.4 billion (S$201.0 million), representing a 2.5% discount to its valuation. With the new Tokyo data centre, KDCREIT’s assets under management is at S$3.9 billion and a total of 23 data centres across 10 countries in Asia Pacific and Europe.
3.iEdge S-REIT Index
In the last four weeks, the iEdge S-REIT Index slightly fell after its rally due to the anticipated 50 bps rate cut on 18 Sep by the US Federal Reserve. From 3Q24 to 18 Sep, the index rose 14.8%, with distributions bringing the total return to 17.5%. Since then, the index declined about 2%. The four weeks have also seen the rate outlook inch less accommodative on account of the resilience of the US economy.
In the first half of 2024, S-REITs experienced net institutional outflows amounting to S$1.07 billion. Since then, 16% of this has reversed, with net inflows observed in the second half of 2024 up to 15 Oct.
The S-REIT sector has now become one of the top four sectors for net institutional inflows since 30 Jun. Notably, $Acro HTrust USD(XZL.SI)$ registered the highest net institutional inflow relative to market cap in the second half of 2024 up to 15 Oct, driven by transactions associated with its significant rebrand.
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