Nine trusts bagged $2.7b through rights issue

Frasers Logistics Trust and Manulife used their funds to finance property investments.

The Singapore Exchange (SGX) revealed that eight real estate investment trusts (REITs) and one stapled trust have raised $2.7b in total funds through rights issues from January 2017 to June 2018. SGX noted that most funds are geared to finance property investments.

The said trusts saw a total return of +1.9% as well as an average aggregate level ratio of 35.6%, a dividend indicated a yield of 6.9%, and a price-to-book ratio of 0.9.

Amongst those that raised funds to finance property investments are Manulife, which raised US$197.2m for the purchase of two office properties in Washington DC and Georgia in the US, whilst Frasers Logistics raised $147.1m to fund the purchase of 21 European logistics properties in the Netherlands and Germany.

CapitaLand Commercial Trust raised the highest amount of $700m from thier rights issue listed in October 2017. This was followed by Ascott Residence Trust ($443m), Manulife US REIT with $391.50m ($283m) raised and Mapletree Logistics Trust, which raised $286m from rights issue, amongst others.

SGX noted that analysts have noticed revived investor interest for REITs in recent times despite the less-than-favourable backdrop, analysts have noted revived investor interest in REITs recently.

“This is driven by a flight to safety amidst rising risk-aversion, following ongoing US-Sino trade tensions, fears over Italy's budget woes and the upcoming US mid-term elections,” SGX said.

SGX also said that a DBS Group Research noted that sentiment has also been boosted by improving fundamentals in the domestic office and hotel property segments.