Mapletree Logistics Trust grapples with rising vacancy risks

Blame it on single-user asset leases.

Mapletree Logistics Trust will face greater vacancy risks in FY16 to FY17, due to a high percentage of single user asset (SUA) leases in its portfolio.

According to a report by Barclays, 45% of the REIT's net lettable area are up for renewal in FY16 and FY17, of which 21.8% are SUAs.

“We estimate 6 SUAs in Singapore whose leases may not be renewed accounting for 5% of revenues. There would be short term pressure on portfolio occupancy due to downtime from SUA/MTB conversions. Management expects demand for logistics space in Asia to remain stable, but for rent growth to be subdued from increased supply in Singapore, China and Malaysia,” said the report.