Here’s why Keppel REIT isn’t fazed by declining banking and finance demand

Technology tenants are in town.

The real estate investment trust likely won’t flinch as banking, insurance, and financial sector tenants decline this quarter, as it has recently found new tenant darlings.

According to analysts from UOB Kay Hian, the REIT is actually buttressed by a surge in demand from the telecommunications, media, and technology sector, which accounted for approximately half of new leases signed.

"New tenants in the quarter include online media giant Netflix, which recently flagged off the official launch of its streaming services locally. The TMT sector now accounts for about 11% of space leased, up from 10.2% in the previous quarter as the banking, insurance and financial sector saw its share slip 2.5ppt qoq to reach 45% in the quarter," UOB Kay Hian said.

UOB Kay Hian added that Keppel REIT assured that no incentives were dangled to entice these new entrants, even as they took on leases for periods as long as five yeras.

“For the full year, the take-up remained healthy with about 50% of the 114 leases concluded for 1.6m sf of space being new to Singapore (25%) and expansionary (25%) in nature,” UOB Kay Hian said.