SINGAPORE (Apr 4): Singapore REITs (S-REITs) have a seen net institutional inflows of $82.7 million, $42.7 million and $114.2 million for the respective first three months of 2019, according to recent SGX data for 1Q19.

This brings the sector’s inflows to $239.6 million for 1Q19, with S-REITs being the top net buy sector in Jan 2019.

The five best-performing S-REITs in the year to date (YTD) were namely: Sasseur REIT, CapitaLand Retail China Trust (CRCT), Keppel-KBS US REIT (KORE), Mapletree Logistics Trust (MLT) and Mapletree North Asia Commercial Trust (MNACT).

They have delivered returns of 19.4%, 18.2%, 17.6%, 17.6% and 19.6%, respectively, in the YTD to average a total return of 19.6% -- and bring their one-year total return to 11%.

In a Tuesday update, the Singapore Exchange (SGX) says analysts have observed a revival in investor interests in S-REITs since last year, driven by a flight to safety amid the uncertain outlook for US-Sino trade negotiations; the hunt for higher yields; and as global equity markets remain volatile.   

Going forward, the bourse expects the “relatively strong fundamentals” of S-REITs to help mitigate the impact of a higher interest-rate environment as SGX estimates 80% of the trusts to have hedged at least 70% of their debt with fixed rates, while all are required to cap their gearing ratio at 45%.

S-REIT performance is also expected to be supported by dovish signals from the US Federal Reserve (Fed) during its March 20 policy-setting meeting.

“Most officials also anticipate one interest rate increase in 2020 and none in 2021, compared to December, when Fed officials said they expected two rate hikes this year and another in 2020,” says SGX.

Units in Sasseur REIT, CRCT, KORE, MLT and MCNAT are trading at 79 cents, $1.57, 72 US cents, $1.48 and $1.32 as at 1:03pm.