S-REITs are a class of investments that can be described as a hybrid between bonds and listed equities.

S-Reits that distribute at least 90 per cent of their taxable specified income qualify for tax transparency treatment for the same year.

Given this unique nature, they can potentially offer both long-term capital appreciation like equities and regular income streams like bonds, delivering competitive total returns.

In Singapore, the average 12-months distribution yield of Singapore Reits and property trusts stands at 6.2 per cent, as of end February 2021.

With Covid-19 developments and economic recovery as overarching global market drivers, S-Reits have averaged a 1.1 per cent total return in the first two months of 2021, and a 7.4 per cent decline over the past 12 months. However, among the highest yielding Singapore Reits and property trusts, there are some which saw positive total returns in both the aforementioned time periods.

Within this group, the top three 2021 performers are ARA Logos Logistics Trust, Sasseur Reit and EC World Reit.

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Together, they boast an average distribution yield of 7.4 per cent.

ARA Logos Logistics Trust, which welcomed its new sponsor - Logos Group - in 2020, announced its maiden acquisition from the sponsor just six months post-rebranding.

The Reit noted that this will enlarge its total asset under management from S$1.3 billion to S$1.6 million post acquisition while allowing it to ride on the e-commerce growth and robust demand for cold storage space.

For FY2020, the Reit reported 3.4 per cent and 4.8 per cent year-on-year increase in gross revenue and net property income (NPI) respectively.

Distribution per unit (DPU) increased 8.9 per cent to 2.927 cents in H2 FY2020 but dipped 4.9 per cent for the full year due to one-off distributions in FY2019 and an enlarged unit base from fund raising activities in FY2020.

On a like-for-like basis, excluding capital and one-off distributions, FY2020 DPU would have been 8.8 per cent higher year on year.

Sasseur Reit, the only retail S-Reit which generated positive total returns in 2020, provides exposure to the retail outlet mall sector in China.

The Reit announced an 18.8 per cent year-on-year increase in Q4 2020 DPU, mainly attributed to the rapid rebound of the Chinese economy in the second half of 2020.

The Reit also completed a refinancing exercise in September 2020 which lowered its weighted average cost of debt from 4.4 per cent in Q4 FY2019 to 3.2 per cent in Q4 FY2020, excluding upfront fees.

EC World Reit, which provides exposure to the e-commerce and logistics industry in China, has 49.7 per cent of its assets by net lettable area in e-commerce logistics, 25.6 per cent in port logistics and 24.7 per cent in specialised logistics.

One of its e-commerce logistics assets, Wuhan Meiluote, which was located at the epicentre of the Covid-19 outbreak in early 2020, saw its occupancy decline to 35.0 per cent in Q3 FY2020 but rebounded to 86.5 per cent as at Dec 31, 2020.

The Reit announced DPU of 1.427 cents for Q4 FY2020, up 2.8 per cent quarter on quarter, while full year DPU declined 11.3 per cent year on year due to rental rebates in Q1 FY2020.

The manager has decided not to receive its performance fee for the year. SGX RESEARCH

• For more research and information on Singapore's Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.

• Source: SGX Research S-Reits & Property Trusts Chartbook.