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Area due for renewal (‘000sf)
Average existing rental rates (psf pm)
1,400 $4.00
1,200
$3.50
$3.00
1,000
$3.28
$2.99
$2.75
$2.50
800
$2.36
$2.00
$1.53 $1.53 $1.57
600
$1.50
$1.03
400
$1.28 $1.27
$1.00
200
$0.50
0
Area (sf) for Renewal in FY10/11
Area (sf) for Renewal in FY11/12
Average Existing Rates (psf pm) for
FY10/11
Average Existing Rates (psf pm) for
FY11/12
Business &
Science Parks
Hi-Tech
Industrial
Light
Industrial
Flatted
Factory
Logistics &
Distribution Centres
Manager to selectively develop
properties which are in line with the
economic drivers of Singapore.
The Manager will also continue to
evaluate and make disciplined
acquisitions of high quality properties
that could be yield accretive to the
portfolio. We will focus on choice
properties which are versatile in use
and offer sustainable long term returns.
In addition, the Manager will continue
to assess potential investment
opportunities in the region on a
prudent and discerning basis.
Overseas investments will only
materialise if we could find suitable
opportunities with acceptable riskadjusted
returns.
CONCLUSION
The financial markets have
rebounded significantly since April
2009 and the economic climate
has improved over the past year.
The near term outlook appears to
be positive; however, considerable
uncertainties remain given the
sovereign debt risk, the unusually
high unemployment, muted growth
dynamics, persistently large deficits
and regulatory uncertainty in certain
developed and developing countries.
Asia is likely to see positive growth
rates and lead the global economic
recovery. In April 2010, Ministry
of Trade and Industry, Singapore,
revised Singapore’s growth estimates
for 2010 to between 7.0% and 9.0%
as compared to February 2010
growth estimates of between 4.5%
and 6.5%. The Singapore industrial
property sector seems to be turning
the corner with a pause in the decline
of rental rates and marginal upturn in
rental rates for selected sub-sectors.
If the current rate of economic
recovery is sustained, the industrial
property market could begin its
recovery soon.
In the new financial year, about
15.3% of A-REIT’s revenue is due for
renewal, the outlook of which will
largely depend on the sustainability
and strength of the global
economic recovery.
A-REIT’s portfolio has a weighted
average lease to expiry of about
4.8 years. The diversified nature of
A-REIT’s portfolio across six subsectors
of the industrial property
and a good mix of long and short
term leases provide a high degree
of predictability and sustainability of
the earnings for its portfolio.
Barring any unforeseen
circumstances, the Manager aims
to at least maintain the current level
of net income for A-REIT in the new
financial year.
8th Annual Report FY09/10
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