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REIT Results By The Numbers During Covid-19

Alvin Chow
Alvin Chow

Some REITs have released their results that covered the periods of Covid-19 and the Circuit Breaker implementation. We now have some indication of Covid-19’s impact to real estate performance.

Office REITs

Both Keppel REIT (SGX:K71U) and CapitaCom Trust (SGX:C61U) registered an 8% decline in revenue (comparing 2Q2020 to 2Q2019) while Keppel Pacific Oak REIT (KORE) (SGX:CMOU) bucked the trend and gained 20% in revenue. KORE reported strong rental reversions in tech hubs of Seattle and Austin. I suspect that the tech companies were benefiting from the remote working arrangements and may have even expanded their operations during the period. Hence, KORE was able to rub off the positive effect in their properties catering to tech companies.

Office REITs% Change in Revenue (2Q2020 vs 2Q2019)
Keppel REIT-8%
CapitaCom Trust-8%

In terms of DPU changes, CapitaCom Trust suffered the worst decline of 23% among the 3 office REITs. One of the key reasons was the lower contribution from Raffles City to the amount of S$13.2 million. This was due to rental waivers, loss of carpark income and lower income from hotel and office units during the Circuit Breaker period. KORE and Keppel REIT fared better and had increased their DPUs.

Office REITs% Change in DPU (2Q2020 vs 2Q2019)
Keppel REIT+1%
CapitaCom Trust-23%

CapitaCom Trust also saw a 4% dip in their Net Asset Value (NAV) due to lower property valuations while KORE and Keppel REIT were pretty much unscathed.

Office REITs% Change in NAV (30 Jun 2020 vs 31 Dec 2019)
Keppel REIT-1%
CapitaCom Trust-4%

CapitaCom Trust’s properties in Singapore have all registered lower valuations by an average of 2% compared to 6 months ago. This is probably drive by lower expectations of rental income in the near future.

CapitaCom Trust performed the worst among these 3 office REITs. Its occupancy in 2Q2020 was the second lowest in the past 14 years. The future is still uncertain as some companies may not seek to renew the lease or downsize their space if work-from-home policy is adopted permanently.


We only have CapitaMall Trust’s (SGX:C38U) results as Frasers Centrepoint Trust has yet to publish its report at the time of writing. The mall numbers were worse than that of the Office properties. I suspect this might be due to more rental support given to the tenants in the malls as they tend to be small medium enterprises. This is unlike Grade A office whereby most tenants are multinational companies and are better positioned to weather Covid-19 impact.

% Change Revenue
2Q2020 vs 2Q2019
2Q2020 vs 2Q2019
30 Jun 20 vs 31 Dec 2019
CapitaMall Trust-40%-27%-4%

CapitaMall Trust has also seen lower valuations across all the malls in their portfolio.

The good news is that the occupancy rates are holding up in the malls.

Industrial REITs

My view is that Covid-19 would discourage working in the office and shopping in the malls, but essential supplies must continue and industrial properties that are used for production and logistics would prove their worth during such times.

It is harder to compare the Industrial REITs results as some reported half-yearly while others reported quarterly. That said, Keppel DC REIT (SGX:AJBU) is the obvious performer. It isn’t surprising as more video conferencing and data consumption were needed during the Circuit Breaker. More servers were needed to cope with the demand and that created more business for the REIT. Mapletree Log did well too with a 10% rise in revenue while Sabana REIT (SGX:M1GU) and ESR REIT (SGX:J91U) saw revenue decline.

% Change in Revenue 30 Jun 2020 vs 31 Mar 2020
Mapletree Log+10%
Mapletree Ind0%
% Change in Revenue 30 Jun 2020 vs 31 Dec 2019
Keppel DC+38%

But the decline in DPUs were pretty ugly. This is because most of the management have chosen to retain part of the distributable income to prepare for potential rental support in the future.

% Change in DPU 30 Jun 2020 vs 31 Mar 2020
Mapletree Log+1%
Mapletree Ind-7%
% Change in DPU 30 Jun 2020 vs 31 Dec 2019
Keppel DC+14%

Keppel DC REIT shone again as the only industrial REIT to register a gain in NAV while the rest remained flat or saw declines. Results for ESR REIT and Sabana REIT have been the worst of the lot thus far and both are undergoing a merger.

% Change in NAV 30 Jun 2020 vs 31 Dec 2019
Keppel DC+3%
Mapletree Log0% (compared to 31 Mar 2020)
Mapletree Ind0% (compared to 31 Mar 2020)


We have a glimpse of Covid-19’s impact on various types of properties. Malls are the worst hit with large declines in revenue and DPU. Both malls and Grade A office have seen lower valuations too. My view is that the impact to malls should be temporary and we should see better numbers in Q3 and Q4 as shoppers return. However, office may feel more lasting impact if companies increasingly adopt work-from-home policies.

Results for industrial REITs are mixed. Keppel DC REIT presented the most inspiring set of results as it reported higher revenue, DPU and NAV. It should see greater days ahead as the economy goes more digital.

Alvin Chow
Alvin Chow
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.
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