More visibility needed in renewal of land tenure for industrial Reits
THE government's move to shorten industrial land leases has clearly served its purpose well in keeping costs down for end-users. On the other hand, it has been a bane for industrial Reits, which have found limited room for expansion locally and sought out greener pastures overseas in recent years.
But as the land leases of their existing properties are increasingly run down, industrial Reits are stuck between a rock and a hard place if they wish to maintain their asset exposure in their home market.
On the one hand, they face limited new development opportunities here as new sites released by the government come with shorter land leases of 20-30 years since mid-2012, down from the previous 60 years. There are also few quality industrial properties available for sale that are not already part of a Reit.
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