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By Cheryl Tay
Companies in Singapore were reluctant to relocate during the six months from April and September 2012 due to high relocation costs. As such, activity in the leasing market was dominated by renewals, according to Colliers International’s Asia Pacific Industrial Market Overview.
Nevertheless, healthy leasing activity bolstered rental growth over the six-month period. For instance, the average monthly gross rents of warehouse space in eastern Singapore inched up by 0.5 percent to S$1.45 psf, while rents for factory space in the central area rose by 1.3 percent to S$1.54 psf.
At the same time, leasing activity in the high-specs industrial sector, comprising independent high-specs industrial buildings and business park buildings, was also led by renewals.
Supported by lease renewals and higher rents achieved for new buildings, the average monthly gross rents for high-specs industrial space rose to S$3.54 psf per month during the six months between April and September 2012, compared to the preceding period’s S$3.50 psf per month.
Similar to what happened during the six months ended March 2012, industrialists and institutional investors especially Reits looking for their own landed premises, have driven the industrial investment and land sales activities during the period ended September 2012.
Notably, this enabled capital values to rise to 6.1 percent during the period from 5.2 percent previously.
Furthermore, the performance of Singapore’s industrial property market in the next twelve months ending September 2013 will depend on the external factors such as the Eurozone debt crisis and economic performance of China and the US, added Colliers.
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