What is the next step in Australia in terms of operations
and expansion?
In a short time, A-REIT became the 8th largest national
industrial landlord in Australia.
A lot of capital investment and management effort has
been and is still being injected into Australia by A-REIT and
its sponsor, the Ascendas-Singbridge Group.
A local team, headed by Matthew Meredith, General
Manager of Australia, is being put in place to oversee
operations, to manage customer relationships, and seek
new investment opportunities. We intend to build a strong
local competence and enhance our brand. We also plan to
deepen our reach and will seek new ‘bolt-on’ acquisitions
that will augment our asset locations, improve the mix of
warehouse size offerings, diversify into other asset classes,
and improve earnings stability.
With the change in CEO and closer integration with the
Ascendas-Singbridge Group, will we see a change in the
strategic direction of A-REIT?
We have built A-REIT’s portfolio with total assets size of
S$9.9 billion over 14 years. A-REIT is the largest and most
diversified industrial REIT in Singapore, and the third largest
REIT in Asia (ex-Japan) by market capitalisation. We have a
strong management and operations team in place that will
ensure A-REIT will continue to grow and be value-accretive
to its Unitholders.
With regards to the Ascendas-Singbridge Group integration,
there will not be any major change in A-REIT’s strategic
direction. We plan to tap on the enlarged group’s expertise
in many areas such as new business concepts (e.g. Science
Park rejuvenation), shared facilities for swifter execution,
and access to markets and opportunities. This will enable
A-REIT to continue to improve and grow. We can count on
opportunities arising from the group’s portfolio of more
than S$1 billion worth of properties, in mainly the Business
and Science Park segment in Singapore.
The Singapore industrial property market is affected by
the weak Singapore economy and oversupply situation.
How does A-REIT intend to ride out the situation?
A-REIT has always been able to anticipate changing demands
in the Singapore industrial property market. It is focused
on building a high-quality portfolio of business and science
park, hi-specs and integrated development properties that
caters to the needs of the higher-value businesses relevant
to Singapore.
A-REIT has also introduced new business space concepts
such as Aperia, a mixed integrated development in Kallang
Avenue. Its occupancy of 92.9% demonstrates a high level
of customer demand for A-REIT’s quality products.
In challenging times, some industries may slow down but
some others may pick up. Our diversified customer base
of 1,470 tenants will help us ride out the ups and downs of
the economy.
Our immediate focus is to retain existing customers and
at the same time attract new ones. We are continuing to
update our properties through asset enhancements to
rejuvenate and to meet the changing requirements.
We plan to have more engagement with customers to
understand their specific requirements and to increase the
personal reach between our staff and customers. We believe
that this strategy will continue to differentiate A-REIT to
existing and new customers.
What are your plans for China?
The China portfolio, comprising of two business park
properties and one logistics property, are well-located in
Beijing and the greater Shanghai. We are closely monitoring
the economic slowdown and to make appropriate
adjustments to better service our existing and new tenants.
Ascendas Z-link in Beijing is fully occupied, A-REIT City
@Jinqiao in Shanghai, which is in a developing location, is
about 57% occupied while A-REIT Jiashan Logistics Centre has
just completed and has attracted interest from several parties.
We have actually made some capital gains on Ascendas
Z-link and A-REIT City @Jinqiao which were acquired about
5-6 years ago. The China portfolio is currently valued at
about S$374 million.
With a target GDP growth rate of 6.5% – 7.0% in China,
we do see longer term potential in attracting both higher
occupancy as well as capital gains.
.15
A-REIT ANNUAL REPORT
2015/2016
