Ascendas REIT's lucrative business parks under threat from acute space oversupply

The market will add 1.7m of space in two years.

Ascendas REIT's profit-making business parks are at risk from an intensifying industrial space glut.

According to Maybank Kim Eng, the market will add 1.7m of space in the next two years, which far exceeds the average annual demand of 0.7m square feet.

"We estimate 86% of this supply is not built to suit. Notable projects are one-north’s Futuris, Synthesis, Kenesis and Mapletree Business City Phase 2. The quality of this supply is exceptional. It will be centrally located, with live/work/play environments. We expect A-reit’s portfolio in Jurong, Science Park and Changi to be given a run for its money," stated the report.

Business parks aren't A-REIT's only sore spot. Its factories and warehouses are also vulnerable, as demand is tepid while supply is exceptionally strong.

Business parks make up 35% of A-REIT's net property income, while factories make up 41% and warehouses comprise 19.6% of its portfolio.

"In total, 92% of its portfolio will face competitive heat. We are wary of DPU disappointments from competition," noted Maybank Kim Eng.

Also Read

One Sophia sells 30% of units at weekend launch

SLA launches tender to revitalise Tanjong Katong Complex

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!

I want to download the media kit