Asian Reits 'do better than equities, bonds'

Published on Jan 28, 2014


ASIAN real estate investment trusts (Reits) demonstrate better longer-term total return performance than equities and bonds, according to a new report issued by the Asia Pacific Real Estate Association (Aprea).

In the January issue of its real estate index bulletin, Aprea said the latest data suggests that over the longer term - three years and more - Reit total return performance in Asia exceeds that of equities and bonds.

Annualised three-year rolling returns for Asian listed real estate companies overall have been 7.33 per cent and 8.2 per cent for Reits.

Asian equities achieved 3.77 per cent and bonds 2.4 per cent.

All major Reit markets in the region have outperformed equities and bonds over the longer term. The leading performers over this period have been Hong Kong (a five-year rolling return of 29.72 per cent), Singapore (26.71 per cent) and Malaysia (20.01 per cent).

In the same period, equity returns were 12.55 per cent and bonds, 5.55 per cent.

Last year, the outstanding overall Reit performance came from Japan, with total returns of 15.98 per cent, significantly ahead of all other markets and also equities and bonds.

Aprea chief executive Peter Mitchell said the research points to the value of Reits as an investment for "mum and dad" investors and institutions such as pension funds, looking to take long- term positions with their savings.

"The outperformance of Reits against equities and bonds over the medium term demonstrates the appeal of the Reit model," said Aprea chairman Lim Swe Guan.

"Total return of the sector has been underpinned by high income yield which also provided stability during periods of market volatility," he added.