SINGAPORE (Apr 3): A large diversified tenant base, long weighted average lease expiries (WALEs), and manageable aggregate leverage levels — coupled with a degree of geographical diversifica-tion with assets that require limited human in-tervention — are likely to be the most defensive among the REITs.

In this respect, Keppel DC REIT springs to mind. Most of its properties are leased on a core and shell basis which is equivalent to double or triple net leases. As the population in developed markets and places like China work from home (WFH) and broadband us-age increases for video-conferencing and tel-ecommuting, Keppel DC REIT’s tenants will benefit from the higher usage trend rather than the REIT itself.

Similarly, Mapletree Industrial Trust (MINT), which now has around 26% of its portfolio by value in data centres, has these mainly tenant-ed on a core and shell basis. Its tenants could benefit from more use of data centres, and the data centres have a longer WALE than MINT’s multi-tenanted business parks and flatted factories. Its data centre portfolio is 7.7% by value in Singapore, and 18.5% in the US. Ascendas REIT’s IT and data centres account for 17% of value, 12.4% of net lettable area and 11.2% of gross rental income.

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