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Sales of industrial properties remained slow in Q3 2014, with merely 420 caveats for strata factories and warehouses, according to a Savills report.
This translates to a 21.9 percent drop from the previous quarter and a 56.7 percent slump from a year ago, based on deals tallied by Singapore’s Institute of Surveyors and Valuers REALink as of 17 October.
“As the quarter has just ended, the record of caveats has yet to be entirely accounted for and thus we expect the final figure to be close to the 538 caveats recorded in Q2 2014,” Savills said.
Moreover, the prices of 60-year leasehold upper-storey strata factories and warehouses dipped by 1 percent to S$476 per sq ft on a quarterly basis, while its freehold counterparts saw a similar decline to reach S$697 per sq ft. In contrast, prices of 30-year leasehold industrial units rose by 1.9 percent to S$376 per sq ft in Q3 2014.
As for the leasing segment, tenancy agreements slipped by 3.2 percent to 2,060 cases during the third quarter from 2,129 cases in Q2 2014.
The figure for Q3 2014 is roughly similar to the 2,070 deals seen in the same period last year, but shows that leasing growth has significantly fallen. The year-on-year (y-o-y) growth is relatively slow as compared to the historical (y-o-y) growth for the third quarter in the past four years, averaging at 24.6 percent per year.
Additionally, rents of industrial properties stayed the same during the third quarter. Monthly rentals of factory and warehouse spaces remained at S$2 per sq ft, while rents of hi-tech units stood at S$3 per sq ft.
In the Business Park segment, leasing agreements surged by 37 percent to 73 cases on an annual basis in Q3 2014, but it is 17 percent lower than the preceding quarter.
Specifically, Mapletree Business City and One-North commanded the highest monthly median rents of S$4.91 per sq ft and S$4.75 per sq ft respectively. They are trailed by International Business Park (S$4.16 per sq ft), Changi Business Park (S$4 per sq ft), Science Park 2 (S$4 per sq ft) and Science Park 1 (S$3.99 per sq ft).
Looking ahead, sales of industrial properties in the last three months of the year are expected to be fairly comparable to Q3 2014’s figure, but likely lower than the quarterly average seen since 2009, Savills added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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