Wishing REITSavvy Readers a Happy New Year in 2024!
Let's take a brief look back at the S-REIT Trio's performance in 2023!
Get ready to dive into the exciting world of S-REITs with us! Before we kick off our weekly REITs update, we're delighted to share the thrilling news: ReitSavvy is teaming up with SGX to deliver the eagerly awaited 2024 S-REITs Outlook.
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S-REIT 2023 concludes with a notable trio!
| Review of IEDGE S-REIT Index 2023 (YTD) |
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The S-REIT sector experienced a tumultuous journey in 2023, resembling a roller coaster with its ups and downs. In the initial quarter, the IEDGE S-REIT index exhibited a remarkable rally, surging by almost 10%. However, this momentum was short-lived, as the index relinquished its gains and returned to a state of nearly neutral growth. Moving into the second quarter, the REIT index adopted a sideways movement, consolidating its position without significant directional changes. The third quarter brought about a notable event in July 2023 when the Federal Reserve implemented a +25bps rate hike. This decision caused a decline in the REIT index following the announcement, persisting until the near end of October. Nevertheless, in the final quarter, market sentiment turned optimistic as Federal Reserve officials unveiled plans for three interest rate reductions in the upcoming year. This anticipated shift would lead to a decrease in the fed funds rate, transitioning it from the 5.25%-5.5% range to 4.5%-4.75%. Consequently, this positive news spurred a market rally, erasing most of the losses incurred during the challenging third quarter. Did you experience the entire journey on the roller coaster in 2023?
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| 3 Top/Bottom Performing S-REIT in 2023 (YTD) |
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Illuminating the performance spectrum of six S-REITs, comparing the top three achievers to the bottom three under the spotlight. The divergence is stark between the high-fliers and the underperformers in 2023. Top performers secured gains in the low double digits, whereas the laggards suffered losses, reaching as high as 73%! Manulife US REIT emerges as the most significant loser, with its unit holders recently approving the recapitalization plan. The effectiveness of the plan and its potential to revitalize the entire REIT remains to be seen in 2024/2025.
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| 3 Notable S-REIT Events Recap in 2023 |
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Event 1 - Lippo Malls Indonesia Retial Trust Dividend Ceased Lippo Malls Indonesia Retail Trust (LMIRT) suspended future dividend payout on 20 March 2023. Why is that so? The manager chose not to distribute payments on the S$140,000,000 perpetual securities issued on 27 September 2016. Due to the above issue, the dividend stopper provisions under the Perpetual Securities was invoked with the following The Issuer is prohibited from: (A) declaring or disbursing any dividends, distributions, or other payments on the Units, and will ensure that no such payments are made on the Units or (except on a pro rata basis) the S$120,000,000 Perpetual Securities issued on 19 June 2017 (ISIN No. XS1632471352) (referred to as the "2017 Perpetual Securities"); or (B) engaging in the redemption, reduction, cancellation, buy-back, or acquisition for any consideration of any of the Units or (except on a pro rata basis) any of the 2017 Perpetual Securities.
Event 2 - Sabana REIT’s holders vote to remove external manager in favour to form internal manager This marks the first instance in Singapore where a REIT has transitioned from an external manager setup to establishing an internal manager team. The entire process is still a work in progress.
Event 3 - Manulife US REIT holders approve the Recapitalisation Plan Manulife US REIT team announce voting results during 14 Dec 2023 EGM. The voting results for all 3 resolution has receive strong support from shareholders. Resolution 1 (Passed) To approve the Proposed Divestment of the property known as Park Place located at 1650 & 1700 South Price Road, Chandler, Arizona, United States 85286, at a divestment consideration of US$98.7 million as an interested person transaction. FOR - 97.74% Resolution 2 (Passed) To approve the proposed Sponsor-Lender Loan granted by The Manufacturers Life Insurance Company or an affiliate, as an interested person transaction. FOR - 97.55% Resolution 3 (Passed) To approve the proposed adoption of the Disposition Mandate to authorise the disposal of any one or more of the Existing Properties. FOR - 98.07% Manulife US REIT lives to see another day! |
| Singapore REITs Outlook: What's ahead for 2024 |
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Participate in our upcoming event as we explore our insights into what lies ahead for REITs in 2024! We look forward to seeing you there!
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