Ascendas REIT braces for headwinds as factories, warehouses lose lustre

Business parks might be unable to save the day.

Ascendas REIT is bracing for challenging times ahead as its portfolio of factories and warehouses lose lustre among occupiers.

According to Maybank Kim Eng, factories and warehouses are likely to continue to see soft occupancies and weak rental reversions.

While the street expects Ascendas REIT’s business parks to save the day, Maybank Kim Eng warns that this segment could waver as 2016 supply is largely uncommitted.

“We do not expect business parks or the Aperia to be adequate buffers for factories and warehouses. Also, we expect NPI margin compression as A-reit’s proportion of multi-tenanted buildings has increased from 62% to 71%,” stated Maybank Kim Eng.