REITs: Maybank-KE visited JTC. Key takeaways include:
1) JTC is clustering its properties to attract new industry while retaining old ones. This improves synergies between customers/suppliers, industry/R&D/government in the knowledge space and across scientific disciplines in R&D.
2) JTC is also investing in shared facilities among relevant clusters to save costs. An example is one-north’s shared R&D facilities
3) On Iskandar, JTC sees not a threat but a complement. It opines lower-value manufacturing should be located in Iskandar, releasing land for higher-value uses in Singapore.
4) To allow for space renewal and to prevent speculation in industrial land, JTC is moving towards factory/warehouse leases of 30 years or less unless deemed economically strategic. Business-park leases are also capped at 60 years.
For the time being, Maybank-KE maintains Underweight on Industrial REITs, citing sub-normal demand and strong supply of industrial space.
The house has the following ratings for industrial REITs under coverage:
Cache Logistics Trust: Buy, TP $1.33
Mapletree Industrial Trust: Buy, TP $1.74
Ascendas REIT: S4ll, TP $2.27