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Industrial real estate investment trusts (Reits) will see a firm output this year, with positive rental reversions, acquisition and good occupancy rates becoming plus factors, according to OCBC Investment Research in a report by the Singapore Business Review.
Kevin Tan, an analyst from OCBC Investment, said industrial Reits in Singapore are expected to post “healthy” year-on-year growth in distributable incomes and DPUs, “driven by completion of acquisitions, sound occupancy rates and possibly positive rental reversions.”
“On a sequential basis, the financial performances are expected to stay firm, as contributions from new acquisitions are anticipated to be partially offset by higher operating and financing expenses.”
He noted that asset revaluation to provide aid on gearing four industrial Reits – Ascendas Reit (A-Reit), AIMS AMP Capital Industrial Reit (AAREIT), Mapletree Logistics Trust (MLT) and Mapletree Industrial Trust, will also be announcing their financial years. This will be supported by a revaluation of their investment properties.
“Looking at the trend of URA rental and price indexes over the past year, we believe the REITs may likely experience revaluation gains in their portfolios. This may in turn provide some relief on their aggregate leverages, which have mostly been rising amid a spate of acquisitions,” said Tan.
“In fact, we note that MLT had already announced the completion of the valuations of its 98 properties late last week. The aggregate portfolio amount of S$3.9 billion, which will be reflected in its upcoming results, was 3.1 percent and 8.4 percent, respectively to the book values of its investment properties quarter-on-quarter and year-on-year.”
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