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The sluggish rental demand for factories and warehouses is expected to negatively affect the financial performance of Ascendas Real Estate Investment Trust (A-REIT), according to Maybank Kim Eng cited in media reports.
In fact, the soft occupancies and weak rental reversions of factories and warehouses are expected to persist.
While market watchers believe that A-REIT’s portfolio of business parks could offset the sluggish rental demand for factories and warehouses, this flourishing segment could falter as the supply for 2016 is largely uncommitted.
“We do not expect business parks or the Aperia to be adequate buffers for factories and warehouses,” said Maybank Kim Eng.
A-REIT’s net property income (NPI) margin could also deteriorate as the proportion of its multi-tenanted buildings has risen from 62 percent to 71 percent, it added.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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