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DBS: Bringing the Reit to life in S’pore

Posted on 24 Sep 2009 | Comments Off

THE emergence of real estate investment trusts (Reits) as a highly popular instrument here, and applying for initial public offerings (IPOs) via the ATM, are all part and parcel of the financial landscape now.

However, they required much burning of the midnight oil to ensure they came to fruition, and DBS Bank was in the thick of these developments. By launching financial instruments that were new to Singapore such as Reits, bringing in foreign debt and equity offerings, as well as encouraging dual listings, it helped turn the Republic into a key fund-raising centre.

Earlier this month, DBS won an award from the Singapore Exchange (SGX) for just that pioneering role. SGX singled out the bank’s contribution of bringing in local and foreign listings as well as Reits.

DBS’ corporate finance department was set up in 1972. Many now-familiar public corporate names were listed here with the help of DBS. These include Olam, Hyflux and Venture Manufacturing. The bank also had a hand in the IPOs of many Temasek Holdings-linked companies such as Neptune Orient Lines, Singapore Airlines and SingTel. Continue reading →

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Tagged DBS, Funds, Singapore REITS

Not all Reits are created equal

Posted on 24 Sep 2009 | Comments Off

Volatile as the year might have been, the consensus on the inclusion of Reits in investment portfolios is favourable

AT FIRST glance, real estate investment trusts (Reits) watchers will be frustrated by the hung jury that has been the outcome for the first half of 2009. As of the end of August, of the 18 Reits with results in, half have reported distribution per unit (DPU) growth while the other half have reported an erosion of DPU.

Upon closer analysis, however, Phillip Securities analyst Lee Kok Joo noted that there are some sectors within the Reits area that have fared better than the rest. ‘The hospitality sector fared the worst with both Ascott Reit and CDL Hospitality Reit recording decrease in gross revenue as well as lower DPU,’ said Mr Lee in his report late last month.

Despite the blow dealt to the hospitality sector this year, a pickup in tourist arrivals is expected to help turn things around next year. DMG estimates that the weighted average yield for the hospitality Reit sector will pick up in FY2010 to 7.3 per cent, up from a forecast 6 per cent this year.

The industrial Reit sector also provided a reminder this year that DPUs and turnover could go in opposite directions. ‘For industrial sector, all four industrial Reits recorded lower DPU although only MacarthurCook Industrial Reit recorded lower gross revenue,’ Mr Lee added. Continue reading →