Singapore REITs continue to bleed to its lowest levels seen in months even as their visibility rise in the benchmark Straits Times Index due to another REIT joining the reserve list.

Singapore retail and office landlord Suntec REIT (SGX:T82U)) is now part of the STI reserve list effective from 24 June. This takes the number of REITs in the five member reserve list to three. The other two REITs are Ascendas REIT (SGX:A17U) and CapitaCommercial Trust (SGX:C61U).

Suntec REIT joins in two other REITs on the reserve list that will join the STI should one or more of its constituents be deleted before periodic review. 

Counters in the reserved list are used in the event that one or more STI constituents are deleted during the period up to the next review. While there are three REITs within the STI Reserve List, CapitaMall Trust is the sole REIT included in the current 30 STI constituents.

However the ascension of Suntec REIT did not mitigate the current bloodletting of its peers. Suntec REIT joined the ranks of other heavyweights, such as Keppel REIT and Ascendas REIT, which have shed more than 4 percent today.

Singapore REITs plunged today on concerns over a looming credit crunch in the Chinese market. The Chinese Central Bank is expected to keep monetary policy tight, giving rise to concerns that it will inevitably cool the Chinhese economy. The China Enterprises Index, consisting of the top mainland Chinese listings in Hong Kong, sank by 3.2 percent to its lowest since October 2011.

These are the biggest REIT losses on the STI today:

REIT Last Drop % Drop
Parkway Life REIT 2.300 -0.18 -7.26
CapitaRetail China Trust 1.355 -0.10 -6.55
Saizen REIT 0.183 -0.01 -6.15
Fortune REIT HK$ 7.050 -0.35 -4.73
CapitaCommercial Trust 1.425 -0.07 -4.68
Ascendas REIT 2.090 -0.10 -4.57
Suntec REIT 1.465 -0.07 -4.56
Keppel REIT 1.270 -0.06 -4.51
Ascott REIT 1.245 -0.06 -4.23
Frasers Commercial Trust 1.325 -0.04 -2.93

Other REITs have dropped between 2.8 percent and 0.4 percent. The FTSE ST Real Estate Index is down 2.36 percent for the day to 709 points, barely above the 700 support level. This means that S-REITs have by large wiped out all gains made since September 2012.

Further softening of Singapore REITs over the next few days will depend on a variety of factors including the slide of the Singapore dollar against the greenback and further signals from the Federal Reserve and Chinese Central Bank with regards to its monetary policies respectively.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.