OUTLOOK cashplus-stock ESR-REIT merger deal that would have valued Sabana REIT at 54.5 Singapore cents per unit . As at the end of January , Sabana ’ s listed units were trading at S $ 0.38 a piece .
While the Shari ’ ah compliant REIT ’ s assets are predominantly logistics and industrial properties — a category that has seen resilient performance during the pandemic — Han said the road ahead is not without headwinds . The REIT plans to focus on its Refreshed Strategy , first introduced in 2017 , which involves asset enhancements , the disposal of poor performing assets and the potential acquisition of yieldaccretive properties .
However , there remain strong headwinds for the industrial property market . It is still a tenants ’ market as businesses continue to explore how to optimise space usage and operating costs in the new normal . With construction restarting on many projects delayed last year due to the Circuit-Breaker and ample supply of space coming on stream over the near term , the segment also continues to be in an oversupply situation .
Here ’ s what Han told ReitAsiaPacific : “ Covid-19 and its devastating effects will continue to impact all segments of the real estate market in Singapore in the year ahead . The Ministry of Trade and Industry has estimated Singapore ’ s GDP growth to be at a positive 4-6 % this year , compared to a negative 5.8 % in 2020 , indicating light at the end of the tunnel . Still , recovery will be uneven and companies will need to continue to adapt to a still fast-evolving and challenging situation . According to a recent Singapore Business Federation survey , seven in 10 of the firms hurt by Covid-19 say it will take at least a year to recover .
Industrial segment resilient but headwinds remain
Relative to other segments of the real estate market such as hospitality , retail , and office , the industrial segment - including manufacturing , logistics , and warehousing facilities - has been relatively more resilient . Even during the Circuit- Breaker period last year , industrial properties performed comparatively better as many of their tenants were essential service providers .
Ensuring sustainable value with Refreshed Strategy
As landlords , the key is to remain competitive . For Sabana REIT , we will continue to deliver our Refreshed Strategy to ensure sustainable value for Unitholders . This includes progressing on our asset enhancement initiative at our flagship New Tech Park ; our new NTP + mall has seen strong interest from tenants and will help us to grow and diversify revenue contribution when work on it completes in 1Q 2021 . We are also undertaking rejuvenation at select assets such as at 23 Serangoon North Avenue 5 , to better meet the demands of current and prospective tenants and to ensure our properties stay ahead of the competition .
Commonwealth Lane Facade Source : Sabana REIT
At the same time , we are recalibrating our portfolio and tenant mix to be more resilient . Key economic drivers are the electronic and biomedical industries . We are being selective and have onboarded multinational corporations (“ MNCs ”) from these sectors who are in expansionary mode . Already , we have secured new strategic life science and healthcare tenants at 3A Joo Koon Crescent and recently onboarded a major US electronic firm as anchor tenant at 23 Serangoon North Avenue 5 .”
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