Chart of the Day: Check out the stellar performance of offshore REITs

They have delivered 30% on a total return basis.

Singapore’s real estate investment trusts (REITs) have been seeing much greater success in offshore markets, overperforming the rest of Singapore financials both in medium and long term.

Based on a report by Jefferies, offshore REITs have delivered 30% on total return basis versus 2.4% return for STI index and 14% return for Strait Times REIT Index.

“Over the last three years, offshore REITs have annualized 16% total return versus -0.8% for the market index and 7% for the REIT index,” the report said.

These REITS have entire bases outside the island of the city-state. Jefferies reported that the REITs which have benefited from their offshore presence include CRCT, Fortune REIT, Ascendas India, Croesus, MAGIC and Lippo Malls Trust.

“Leaving aside periodic bouts of volatility from backing up of yield curve, we think offshore REITs will continue to benefit from lower cost of capital in countries like China and India. It will lead to lower cost of funding as well as compression in cap rates,” Jefferies furthered.

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