Here’s why Ascendas’ plan to acquire One@Changi is as strategic as it gets

Business parks are all the rage right now.

With headwinds mounting in the REIT space, its imminent acquisition should be a whiff of fresh air for Ascendas.

According to analysts from UOB Kay Hian, the business park segment remains a bright spot due to tighter supply and high pre-commitments.

“Business parks will comprise 18% of AREIT’s portfolio by asset value post acquisition completion, from its current 14%, and the segment is poised to remain resilient in the face of muted supply and high precommitments,” UOB Kay Hian said.

Meanwhile, UOB Kay Hian says no incoming supply of business park and science park space from 2017 onwards, signalling the end of an oversupply overhang.

The business park segment may also continue to see the influx of IT firms in the near term before the bulk of the upcoming office supply kicks in come 4Q16.

“For example, Google and tech heavyweight Microsoft could be venturing towards Mapletree Business City (MBC) and have reportedly signed a lease at MBC Phase II in Alexandra, a business park development by the Mapletree group,” UOB Kay Hian said.