S-REITs Bi-Weekly Update (16-31 May 22)
It is heartening to hear that Beijing and Shanghai plan to relax COVID-19-related
controls after the drop in new COVID-19 cases. The Russia-Ukraine war, however,
remains in a protracted stalemate. Domestically, consumption is normalising and more
employees are working from their offices. Pent-up demand is seen in the surge of
inbound leisure and business travellers. BUY ART (Target: S$1.32), FCT (Target:
S$2.96), FEHT (Target: S$0.82) and LREIT (Target: S$1.01). Maintain OVERWEIGHT.
WHAT HAPPENED IN THE LAST TWO WEEKS
• FSTREI gained 1.1% in the past two weeks. We understand that Amazon and Meta
Platforms are in advanced negotiations to lease office space at IOI Central Boulevard
Towers, the only new supply within core CBD over the next three years. Amazon could take
up 369,000sf of office space covering 11 floors, representing 29% of the available office
space of 1,258,000sf from IOI Central Boulevard Towers.
• The refurbished Changi Airport Terminal 2 has reopened on 29 May 22 to cater to peak
hours arrival flights of airlines operating from Terminal 3. Passenger traffic at Changi Airport
currently averages above 40% of pre-pandemic levels.
• Yield for 10-year Singapore government bonds eased slightly by 10bp to 2.67% during the
last two weeks of May. FSTREI gained 1.1%, comparable to 1.3% for FSSTI.
• Top outperformer: EREIT gained 9.3% after Tong Jinquan acquired 41.7m units to
increase his total stake by 0.6ppt to 10.5%. Reopening plays LREIT, FHT and ART gained
8.6%, 7.4% and 3.6% respectively. CLCT gained 5.5% due to news that Beijing and
Shanghai plans to reopen after the drop in new COVID-19 cases.
• Top underperformer: Diversified REITs CICT and SUN corrected 3.5% and 2.9%
respectively. US REITs KORE and PRIME declined 0.7%.