COMMERCIAL PROPERTY | Staff Reporter, Singapore

Ascendas REIT now Singapore's largest capitalised REIT

It surpassed CapitaLand Mall Trust.

With a capitalisation reaching $7.2b, Ascendas Real Estate Investment Trust (REIT) has now become Singapore’s largest REIT by market capitalisation, surpassing CapitaLand Mall Trust’s $6.9b, a report from MySGX Gateway revealed.

As of December 31, 2016, however, CapitaLand Mall Trust was still the largest in terms of total assets, with total assets worth $10.3b compared to Ascendas REIT’s S$9.7b.

Last year, Ascendas REIT completed the acquisition of 12, 14, and 16 Science Park Dirve and the issuance of consideration units. To further enhance the stability and sustainability of returns, Ascendas REIT plans to continue to invest in properties with long remaining land lease tenures, with its portfolio weighted average land lease to expiry at 46 years.

Ascendas REIT also acknowledged that rising vacancy for industrial property, coupled with an additional supply of about 2.2 million square meters of industrial space for 2017, are seen to put pressure on occupancy and rental rates, while higher interest rates will result in higher expense and lower distributions per unit (DPU).

To mitigate interest rates volatility, about 82% of Ascendas REIT’s borrowings have been hedged and new acquisitions feasibility will have to factor in the potential higher interest rates and impact.

Singapore’s 32 REITs and six stapled trusts have almost doubled their capitalisation in the last five years, maintaining higher average yields and lower average generating rations than the combined REIT sectors of Japan, Australia, and Hong Kong. Combined, all these 38 trusts have a market capitalisation of $71.6b, representing 8% of Singapore’s total market capitalisation. 

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