Business Parks resist industrial REITs downturn

It bucked the downward trend in rents with a 1% uptick.

There is no doubt that industrial space has suffered weak points in 3Q16, with factory, logistics and hi-tech segments seeing weakness in rents amidst a fairly in-line broader Singapore REITs sector.

According to UOB KayHian analyst Andrew Chow, there is but one bright spot in the segment, and that is the business park segment.

"Business parks remain the bright spot due to limited forward supply," Chow said.

To recall, the business park segment registered a 1.0% QOQ increase to $4.20 per sqft.

Retail REITs also deteriorated in the past quarter, as rents continued to be under pressure with negative rental reversions seen across malls.

Meanwhile, office REITs managed to eke out positive rent reversions despite the 18.4% drop in the spot rentals from 1Q15's peak of $11.4 psf.

"There are nascent signs of office rental stabilisation with the rate of decline slowing," the analyst noted.