The Big Showdown: CapitaLand vs Mapletree

When it comes to real estate investment trusts (REITs), CapitaLand and Mapletree are two heavyweight players, both backed by Temasek. While they possess impressive global portfolios, their distinct focuses create significant variability in performance over time.

Recent Performance: CapitaLand Shines

In the past year, all five of CapitaLand's REITs have posted positive returns, ranging from a solid 0% to an impressive 13.2%. In stark contrast, Mapletree's three REITs have struggled, with only one—MPACT—managing a positive return of 3.2%. However, even MPACT's performance doesn't stack up against CapitaLand, placing it lower in the rankings.

Sector Matters: The Winning Formula

Recent trends show that REITs rooted in resilient sectors, like Singapore Retail and data centres, are outperforming those in less stable areas. This is reflected in the strong performances of CapitaLand REITs like CICT and CLAR, which have significant exposure to these thriving markets.

Geographical Focus: The Key to Performance?

Geographical exposure is crucial. Diversifying across regions can protect investors from local economic upheavals. However, Singapore, with its robust economy and a resilient currency, has proven to be a stabilizing factor for CapitaLand REITs, enhancing their value compared to their Mapletree counterparts, which are more exposed to volatile markets.

A Direct Comparison: Stronger Gains for CapitaLand

A closer inspection reveals that REITs with heavier investments in Singapore, like CLAR and CICT, dominate the performance charts. Conversely, Mapletree’s MPACT suffers due to its heavy portfolio in Hong Kong and China, dragging down its overall performance.

Head-to-Head: MIT vs. CLAR vs. MLT

In the Industrial, Data Centre, and Logistics sector, we compare MIT, CLAR, and MLT. Despite having a weaker occupancy rate, CLAR shows promising rental growth, hinting at further gains. MIT, boasting an attractive 7% yield, is currently undervalued, making it a worthy competitor.

Retail Rivalry: MPACT vs. CICT

In the Commercial/Retail segment, CICT shines brightly while MPACT falters. CICT excels in occupancy and rental growth, whereas MPACT's extensive portfolio outside Singapore has significantly underperformed.

Final Thoughts: CapitaLand Takes the Lead

While both Mapletree and CapitaLand have robust foundations as government-linked sponsors, their diverse geographical and sectoral strategies set them apart. For investors, this means a choice between REIT ETFs or a mix of both firms' offerings. Based on our findings, CapitaLand REITs, particularly CLAR and CICT, present a stronger case currently, with MIT also emerging as a potential undervalued gem. Given the prevailing interest rates, MIT stands out as a solid player, offering yields above the sector average despite being a blue-chip S-REIT.