Land lease tenure of new industrial buildings in Singapore is 20-30 years

Hi Eric

Good job for completing some of the video modules!

Logistic, data centre and high spec industrial business are still highly sought, especially in land scarce area like Singapore. Even for business park in near city fringe area is still in high demand. Existing industrial REIT like Mapletree Log has exposure outside of Singapore and only 10% of their land leases in the portfolio are expiring in less than 30 years. Their HK industrial assets which are still facing shortage in supply would likely be renewed since HK government announced auto extension for all the commercial land in HK that's expiring in 2047 (50 years since the handover). For Singapore, I would also expect government to renew them but on the case by case basis since land usage might change from time to time.

So we can still look the industrial REIT sector but only if the valuation is right and the rest of the criteria in the REIT checklist is okay. If a bulk of the portfolio (i.e. Viva Industrial REIT which has been acquired by ESR REIT) is expiring in 20 years or less, then we may have to be more cautious. I will talk more about this in the upcoming live webinar. So remember to sign yourself up for the webclass.