Business park rents to see 5% pick up in 2017

It remains a bright spot for Industrial REITs.

Industrial REITs will surely welcome next year with a bang as its business parks segment remain a bright spot.

According to RHB Research, REITs with exposure to the business parks segment would most likely see growth next year, as demand supply dynamics remain favourable in this segment due to a very limited supply coming on-stream over the next two years at around 120,000 sq ft.

"We expect rents to increase by 1-5% in 2017," RHB said, noting that for the factory and warehouse logistics segment, rents are expected to decline by 3-7% in 2017, with supply remaining elevated amid weak overall demand.

"Ascendas REIT remains a top pick due to its diversified industrial property exposure. We also prefer Viva Industrial Trust for its favourable exposure to the business parks segment and its high dividend yields," RHB noted.

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