Listed in Singapore, the UOB Apac Green Reit ETF (stock codes: GRN and GRE) is a Reit ETF that provides portfolio exposure into higher-yielding Reits in Asia-Pacific with a focus on environmental performance based on the Global Real Estate Sustainability Benchmark’s (GRESB’s) assessment.

Since inception, the ETF has recorded a net inflow of S$87 million with S$18 million shares traded. Retail investors hold roughly 40 per cent of total outstanding shares while institutional investors hold the remaining 60 per cent.

The Reit ETF tracks the iEdge-UOB Apac Yield Focus Green Reit Index which comprises 50 constituents that meet certain environment factors across indicators such as energy and water consumptions, greenhouse gas (GHG) emissions, and green building certifications, while also maintaining a highly competitive dividend yield. The Reit ETF has a dividend yield of around 4.5 per cent.

By applying the green tilt, it means that the 50 constituents of the index emit 19 per cent less GHG emissions, consume 20 per cent less water and 17 per cent less energy than the non-green market-cap weighted version of the index.

This comes on the back of increased spotlight on decarbonisation efforts within the property sector, since it accounts for 30 per cent of global GHG emissions and consumes 40 per cent of the world’s energy, according to the UN Environmental Programme.

During the latest March rebalance, three more S-Reits were added to the index, alongside one Japanese and two Australian Reits, and replacing one Australian and five Japanese Reits. With that, there are now 12 S-Reits in the index.

The three S-Reits included in this round of rebalancing are CapitaLand Integrated Commercial Trust (CICT), Frasers Logistics & Commercial Trust (FLCT), and CapitaLand Ascott Trust (CLAS).

Since the rebalance took effect to date, the three S-Reits recorded over S$35 million in net institutional inflows.

These three were also among the top five S-Reits which booked net institutional inflows totalling S$32 million in the last five trading sessions ended May 3, which also included Keppel DC Reit (AJBU) and Mapletree Logistics Trust (M44U).

CICT reported 11.3 per cent year-on-year (yoy) growth in its first quarter (Q1) 2023 net property income (NPI), boosted by full quarter contributions from acquisitions in the first half (H1) 2022 and improvements in rental income from office and integrated development assets.

CICT achieved retail and office rental reversions at 6 per cent and 4.2 per cent respectively in Q1 2023, bolstered by downtown malls which saw tenant sales jump over 20 per cent yoy and potentially benefitting from the return of tourist arrivals in Singapore.

FLCT reported a 13.4 per cent yoy decrease in NPI for H1 2023, mainly due to the absence of contribution from Cross Street Exchange which was divested in March 2022.

However, it achieved positive rental reversion at 3.6 per cent on an incoming rent versus outgoing rent basis and maintains a portfolio occupancy rate of 95.9 per cent.

CLAS reported 90 per cent yoy growth in revenue per available unit on higher occupancy and room rates.

CLAS is cautiously optimistic about the continued recovery of the hospitality sector and expects demand from international and domestic segments to remain strong.

REIT Watch is a weekly column on The Business Times, read the original version