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Prices and rents of industrial properties in the republic have continued to moderate amidst the higher supply of industrial land and space released by the government in the past few years, JTC’s quarterly market report for Q2 2015 revealed.
During the said period, island-wide prices of industrial premises fell by 0.7 percent on a quarterly basis and 0.9 percent year-on-year.
In particular, capital values of multi-user factories dropped by 0.4 percent from Q1 2015 and 2.3 percent a year ago. That for single-user factories dipped by 1.1 percent quarter-on-quarter, but was unchanged on an annual basis.
At the same time, overall rents of industrial properties in Singapore dipped by 0.7 percent on a quarterly basis and 2.7 percent from Q2 2014.
Rrents for multi-user factories declined by 1.2 percent from Q1 2015 and 3.1 percent year-on-year. That for single-user factories receded by 0.5 percent quarter-on-quarter, but posted a gain of 1.2 percent over the previous period last year.
Business Parks also saw a quarterly and annual rental contraction of 0.3 percent and 0.6 percent respectively, while that for warehouses slid by 0.1 percent and 1.3 percent.
Meanwhile, the island-wide occupancy level for industrial properties improved from 90.7 percent in the preceding quarter to 91 percent in Q2 2015. Despite the better figure, it is still lower than the peak of 93.5 percent in 2012.
The occupancy rate for business parks improved from 83 percent to 85.3 percent, while that for warehouses grew from 90 percent to 91.6 percent.
However, the occupancy level for multi-user factories slipped from 87.5 percent to 87.4 percent in the quarter under review. Similarly, that for single-user factories dipped from 92.9 percent to 92.8 percent.
Looking ahead, around 1.6 million sq m of industrial space are projected to enter the market in 2H 2015, including 290,000 sq m of multi-user factory space.
By 2016, an additional 2.8 million sq m of industrial premises are expected to come on-stream, including 348,000 sq m of business park space and 710,000 sq m of multi-user factory space.
With the large supply pipeline, industrialists will have adequate space to expand their operations in the coming years, said JTC. However, the upcoming stock would surpass the annual average demand of 1.1 million sq m in the past three years.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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