Surging Ascendas REIT collides with industrial sector roadblock

They can’t pop the champagne just yet.

Now is not the time to celebrate for the property firm, even after a modest jump in its earnings, as a gloomy industrial market lurks just around the corner.

According to RHB Research, muted rental growth is almost inevitable for Ascendas REIT, expecting the challenging leasing environment to contend with.

RHB Research says JTC’s 3Q figures added to the disappointment as the industrial property price and rental index declined by 0.3% and 0.8% respectively.

Meanwhile, Ascendas REIT’s healthy lease expiry may be just what the doctor ordered to counter the industrial sector slowdown.

“About 10.2% of leases by rental income are due for renewal over the next two quarters. We note that business parks, hi-specs industrial and logistics buildings which collectively account for 82% of the expiring leases are significantly below market rates,” RHB Research said.

“Market rents are 21.1% above logistics (22% of expiring leases) passing rents, 6.4% above the passing rents for business park space (27%) and 5.7% above passing hi-specs (33%) rents,” they added.

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

How investor stewardship puts companies in a win-win state
Stewardship Asia Centre CEO says a company’s failure to take care of society is a failure to take care of its stakeholders.
Creating harmony in a heterogonous workforce 
An HR expert said tests like DISC can help identify which employees can work best together.