Industrial REITs to face short-term oversupply woes: CIMB

Rise in business park space anticipated.

According to CIMB, industrial REITs, on the other hand, could face short-term oversupply, particularly in the business park space as a large portion of the business park space (c.1.2m sf in 2014) is expected to come onstream.

Here's more:

Of the estimated 19.1m sq ft of industrial space coming online this year, according to DTZ, an estimated 60% is either owner-occupied or pre-committed.

Due to this reason, coupled with the recovery in the global economy, we expect industrial rentals to remain resilient this year. In addition, with JTC recently toughening its stance on the buying and selling of industrial properties by third-party lessees, we expect fewer sale-and-leaseback deals in 2014.