Real Estate Investment Trusts (REITs) are popular investment vehicles known for their stable income and potential for long-term capital appreciation. In the Singapore market, there are several REITs that have recently experienced a significant retraction of over 10% and are currently trading at resistance levels.
This article will delve into five such Singapore REITs: Capital Ascendas REIT, Frasers Centrepoint Trust, AIMS APAC REIT, Mapletree Industrial Trust, and Suntec REIT. We will explore their recent performance, examine the support levels they face, and discuss potential factors influencing their future prospects.
1. Capital Ascendas REIT
Capital Ascendas REIT has witnessed a decline of over 9% in its share price recently. Despite its strong track record, the REIT has encountered some selling pressure at its current trading level. It is currently trading at its support level of around $2.68, which has been tested 3 times since Dec 2022.
Fundamentally, factors influencing its performance may include changes in the commercial property market, economic conditions, and interest rate fluctuations. Investors should monitor how the REIT navigates these challenges to determine its potential for a rebound.
2. Frasers Centrepoint Trust
Frasers Centrepoint Trust has also experienced a significant retraction of 9% from its recent high, presenting an opportunity for investors seeking potential value. It is trading at its support zone of $2.12 – $2.16, right below its 200-day moving average. The price makes a lower low recently, but the momentum indicator is picking up, showing a divergence pattern, we might potentially still see some selling pressure in the coming days.
Key considerations for investors include the performance of its retail properties, consumer spending trends, and the impact of e-commerce on brick-and-mortar retail. Close monitoring of these factors will be crucial to assess the REIT’s future prospects.
3. AIMS APAC REIT
AIMS APAC REIT has recently retraced by 5%, signaling a potential buying opportunity. It has rebounded from its support. And it is the very few REITs that trading above it 200-day moving average. Fundamental is still strong, recorded double-digit rental growth in its most recent quarter.
As an industrial-focused REIT, AIMS APAC’s performance may be influenced by factors such as demand for industrial space, supply chain disruptions, and global trade dynamics. Investors should analyze these factors alongside the REIT’s financial performance to gauge its growth potential.
4. Mapletree Industrial Trust
Mapletree Industrial Trust, known for its portfolio of industrial properties, has seen a notable 9% retraction in its share price. It is trading near its support as well as the upward trend line. The mid-term trend is still bullish. If the support level holds, we might see at least a 10% upside to its nearest resistance level in the medium term.
The REIT’s current resistance level suggests cautious investor sentiment. Factors such as the overall performance of the industrial sector, technology adoption, and economic recovery trends will be important considerations for investors assessing the REIT’s future performance.
5. Suntec REIT
Suntec REIT has experienced a decline exceeding 23% and is currently trading at its support zone around $1.26 – $1.28. The next support will be at $1.04. If the current support holds, it will potentially form a bullish chart pattern – double bottom.
In general, investing in Singapore REITs with strong fundamentals that have retraced by almost 10% presents a good buying opportunity for long term investors, who are seeking consistent dividend payout.