S-REITs Bi-Weekly Updates (1-15 Oct 21)

We expect the surge in daily COVID-19 cases to peak in October and stabilise thereafter. Thus, we advocate accumulating reopening plays during this month of heightened uncertainty and volatility. BUY hospitality REITs ART (Target: S$1.16) and FEHT (Target: S$0.71). BUY retail REITs FCT (Target: S$3.06) and LREIT (Target: S$1.01). Maintain OVERWEIGHT.

WHAT HAPPENED IN THE LAST TWO WEEKS

FSTREI gained 1.9% in the past two weeks. Singapore has extended quarantine-free vaccinated travel lanes (VTLs) to nine more countries, namely Canada, Denmark, France, Italy, the Netherlands, Spain, Britain and the US from 19 Oct 21 and South Korea from 15 Nov 21. Singaporeans can travel to these countries and return without serving stay-home notice (SHN). Travellers coming to Singapore will have to take two polymerase chain reaction (PCR) swab tests, a pre-departure test 48 hours before their flight and an on-arrival test at Changi Airport. The calibrated easing of border restrictions will help rebuild Singapore’s status as an aviation hub with global connectivity.

Top outperformer: Hospitality REITs led the recovery with CDREIT, FHT, ART and FEHT gaining 17.3%, 12.1%, 9.8% and 7.5% respectively. S-REITs with exposure to retail malls, such as CICT, MAGIC, SUN, SGREIT and FCT, gained 5.9%, 5.2%, 5%, 4.8% an 4.4% respectively.

Top underperformer: There was light profit-taking on New Economy plays. Data centre REIT KDCREIT and MINT corrected marginally by 1.2% and 0.4% respectively.