HOW HIGH-TECH PROPERTIES AFFECT INDUSTRIAL REIT PORTFOLIOS; EVIDENCE FROM ASCENDAS REIT

Abstract

High-technological (high-tech) industrial buildings, often known as smart buildings, have emerged as key areas of interest for investors (CBRE, 2020). The market for high-tech industrial properties is set to undergo a major institutionalization in the near future. The focus was placed on three industrial property types – High-Specification (high-specs) Properties and Data Centres, and Light Industrial Properties. In this paper, high-tech industrial properties are examined in relation to industrial REIT portfolios, focusing specifically on their profitability and valuation. In the analysis of acquisition data from 2010 through 2020, the quantitative segment found that high-tech industrial properties had positive effects on profitability and valuation. In addition, the qualitative segment analysed the acquisitions of Ascendas REIT (A-REIT), Keppel Data Centre Real Estate Investment Trust (KDC REIT), and Mapletree Industrial Trust (MIT) as part of a cross-comparison analysis. As Singapore's first and largest business space and industrial REIT, A-REIT was chosen as the main focus. It would have been interesting to examine their growth strategies and how their moves affected the other industrial REIT players in the market over time. The findings of this study should provide meaningful insights into future investment strategies involving considerations in high-tech industrial property acquisitions.