S-REITs Bi-Weekly Updates (16-28 Feb 22)
Russia’s invasion of Ukraine is shocking. The ramifications for the global economy and outlook are immense and severe. The abrupt twist of events causes heightened uncertainties. We seek solace and support from S-REITs with resiliency. BUY ART (Target: S$1.29), FCT (Target: S$2.98), MCT (Target: S$2.48) and MINT (Target: S$3.72). We also like CICT (Target: S$2.45) and SUN (Target: S$1.74) for their diversified
portfolios. Maintain OVERWEIGHT.
WHAT HAPPENED IN THE LAST TWO WEEKS
• FSTREI corrected 1.3% in the past two weeks. Russian forces launched a full-scale invasion of Ukraine by land, air and sea last Thursday (24 Feb 22). Facing stiff resistance from Ukrainian forces, Russia has put its nuclear forces on special alert, risking an escalation to unconventional nuclear weapons. Western countries have imposed sanctions by freezing the assets of major Russian banks and its central bank and cutting selected Russian banks off from the SWIFT messaging system. Peace talks between Russia and Ukraine ended without any breakthrough on Monday.
• S-REITs remain resilient despite the market upheaval. FSTREI weakened by a mere 1.3%, compared to the massive correction of 5.2% for FSSTI.
• Top outperformer: SASSR gained 2.4% after posting good 2021 results with record DPU of 7.104 S cents. CICT and SUN, large cap S-REITs diversified across multiple asset classes, gained 1.4% and 1.3% respectively. For data centre REITs, MINT gained 1.2%, while DCREIT and KDCREIT were unchanged.
• Top underperformer: US REITs PRIME and KORE dropped 7.8% and 3.4% respectively. ELITE, which owns commercial buildings in the UK, corrected 6.8%. Smaller cap industrial/logistics REITs EREIT, ALLT and AAREIT declined 5.6%, 2.9% and 2.9% respectively.