Nikko AM has partnered with Straits Trading on the Nikko AM-Straits Trading Asia ex Japan REIT ETF (Photo: REITsWeek)

Nikko Asset Management and Straits Trading have teamed up to offer an exchange traded fund (ETF) that comprises of Asian-listed REITs, including those in Hong Kong, Malaysia, and Singapore.

Known as the Nikko AM-Straits Trading Asia ex Japan REIT ETF, the Singapore-listed security will track the FTSE EPRA/NAREIT Asia ex Japan Net Total Return REIT index.

“Investors get access to a portfolio of REITs in a region of Asia which provides exposure to properties in high-growth sectors such as financial hubs, middle class consumption, and tourism”, said a Nikko AM official in response to questions from REITsWeek on 6 March.

The are 23 constituents of the Nikko AM-Straits Trading Asia ex Japan REIT ETF as at the time of writing, and these include Singapore-listed Ascott REIT, Hong Kong-listed Link REIT, and Malaysia-listed Sunway REIT.

“Dividends, if any, will be paid on a quarterly basis”, said Nikko AM, adding that dividends are currently estimated at 5% per annum based on DPU of REITs in the FTSE EPRA/NAREIT Asia ex Japan Net Total Return REIT index over the period of 2011 to 2016.

Management fee for the ETF has been set at 0.5% per annum, and initial offer period (IOP) for the security runs from 6 March to 21 March 2017, with an initial offer price of SGD1.00.

Interested investors can apply for the ETF through DBS Vickers Securities, OCBC Securities, Philip Capital, and UOB Kayhian during the IOP, and it will start trading on the Singapore Exchange on 29 March 2017.

The Nikko AM-Straits Trading Asia ex Japan REIT ETF is the second REIT ETF to list on the bourse. In October 2016, Singapore saw the listing of its first REIT ETF, the Philips SGX APAC Ex-Japan Dividend Leaders REIT Index.

Constituents of the FTSE EPRA/NAREIT Asia ex Japan Total Return REIT Index, which the Nikko AM-Straits Trading Asia ex Japan REIT ETF is tracking:

REIT Country Type Capped Index (%)
Ascott REIT Singapore Hospitality 2.15
Hui Xian REIT Hong Kong Diversified 3.2
Spring REIT Hong Kong Industrial + Office 0.84
Yuexiu REIT Hong Kong Retail 1.93
CapitaLand Retail China Trust Singapore Retail 1.71
Mapletree Greater China Commercial Trust Singapore Retail 4.15
Champion REIT Hong Kong Industrial + Office 4.14
Link REIT Hong Kong Retail 9.68
Fortune REIT Hong Kong Retail 5
Lippo Malls Indonesia Retail Trust Singapore Retail 1.78
First REIT Singapore Health 1.49
Sunway REIT Malaysia Retail 2.18
Pavilion REIT Malaysia Retail 1.27
IGB REIT Malaysia Retail 2.13
Mapletree Commercial Trust Singapore Diversified 6.67
CDL Hospitality Trust Singapore Hospitality 2.08
Mapletree Logistics Trust Singapore Industrial 3.56
Keppel REIT Singapore Office 4.43
Mapletree Industrial Trust Singapore Industrial 4.77
Ascendas REIT Singapore Industrial 10.28
CapitaLand Commercial Trust Singapore Office 7.03
Suntec REIT Singapore Retail + Office 9.62
CapitaLand Mall Trust Singapore Retail 9.88

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.