Ascendas REIT's property at 9 Changi South Street 3, Singapore. (Photo: REITsWeek)Ascendas REIT's property at 9 Changi South Street 3, Singapore. (Photo: REITsWeek)

With an eye on prospects of an improving GDP in the country, DBS Equity Research has recommended an overweight position on Singapore-listed office and industrial REITs.

Supply pressures for both the office and industrial sectors are also expected to ease as 2018 approaches, said the bank in an investment report issued on 17 May.

“With upside to Singapore GDP growth forecasts, we believe this would translate to stronger pre-leasing activities at various new office buildings and take-ups in the industrial space”, said DBS adding that the prediction also applies to hi-tech spaces and business parks.

The bank remains confident of a recovery in office rents by end-2017 or early 2018, and named Keppel REIT as its top pick for the sector, with a target price of SGD1.23 on the counter.

On the industrial front, DBS highlighted Ascendas REIT and Mapletree Logistics Trust as its choices for the sector given the REITs’ financial flexibility to pursue acquisitions and asset enhancement works.

The bank has given target prices of SGD2.65 and SGD1.28 on Ascendas REIT and Mapletree Logistics Trust respectively.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.