Singapore real estate investment trusts (S-Reits) with industrial assets have delivered a resilient performance with continued positive rental reversions, as managers stay active in their lease and asset management.
Of the seven actively traded industrial S-Reits, four announced their earnings in the past week – and all have reported positive rental reversions for their portfolios in the latest reporting period ended Dec 31, 2024.
Sabana Industrial Reit reported positive rental reversion of 27.1 per cent for the fourth quarter of 2024, while its full-year rental reversion rose to 20.6 per cent, its fourth consecutive year of double-digit positive rental reversion.
The Reit – which owns a portfolio of 18 Singapore assets – had 75 new and renewed leases concluded in FY2024 totalling 911,707 square feet (sq ft).
Mapletree Industrial Trust reported a weighted average rental reversion rate of around 9.8 per cent across all property segments in Singapore for its third quarter. The average rental rate of its Singapore portfolio increased to S$2.28 per sq ft per month in Q3 FY2025, up from S$2.26 in the previous quarter.
Mapletree Logistics Trust also reported positive rental reversion of 3.4 per cent for its portfolio for Q3, with positive rental reversions in all markets except China, which remained challenging with negative rental reversions.
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Excluding China, portfolio rental reversions would have been 5.4 per cent in Q3 FY2025, an improvement from 3.6 per cent a quarter earlier.
ESR Reit reported positive rental reversion of 10.3 per cent for FY2024, with logistics and high-spec industrial assets outperforming general industrial and business park assets. The manager expects new economy sectors to lead positive rental reversions, albeit at a slower pace.
JTC data indicated that industrial rents in Singapore rose 3.5 per cent in 2024, a decline from the 8.9 per cent increase in 2023, and representing the slowest pace of increase since 2021.
S-Reits’ managers have noted that the outlook is less certain, as macro risks such as trade tensions and the slower pace of rate cuts could dent demand for industrial space. The supply of industrial space is also expected to rise in 2025, with about 1.2 million square metres (12.9 million sq ft) of new space expected to be completed.
But industry expectations are still for industrial properties’ occupancy and rental rates to remain stable in 2025.
Cushman & Wakefield anticipates largely steady rental growth for most industrial submarkets of around 2 to 3 per cent year on year – apart from suburban business parks, which are expected to see no growth in rents, given a supply glut.
The property consultancy said in its Singapore Market Outlook 2025 report that industrial rental growth is expected to moderate, but many industrial properties could still see significant positive rental reversions as their leases come up for renewal. This is largely due to robust industrial rental growth in recent years, with overall industrial rents growing by over a fifth since 2019.
Other S-Reits in the industrial subsector – Aims Apac Reit, CapitaLand Ascendas Reit and Daiwa House Logistics Trust – are scheduled to report their earnings in the coming weeks. SGX RESEARCH
The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
