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Singapore’s industrial property market saw increased vacancy rates for multiple-user factory, business park and warehouse segments, while the single-user factory segment posted a drop in vacancy rate in Q4 2015, showed JTC statistics.
Vacancy rates of multiple-user factory, business park and warehouse space segments climbed by 0.1 to 1.1 percentage points on a quarter-on-quarter basis, while the vacancy rate of the single-user factory segment dipped by 0.1 percentage points.
JTC noted that the stock for multiple-user factory, single-user factory, business park and warehouse space increased by 75,000 sq m to 200,000 sq m in Q4 2015. The amount of space occupied in these segments also rose by 57,000 sq m to 133,000 sq m.
Meanwhile, industrial space prices dropped in Q4 2015, with multiple-user factory space and single-user factory space dipping by 1.0 percent to 2.2 percent.
Despite the decline, Colliers noted that overall industrial prices remained elevated as of Q4 2015, given that the All Industrial PPI rose by a substantial 70.9 percent during the last four years.
Rents for multiple-user factory space, single-user factory space and warehouse space also declined by 1.1 percent to 1.5 percent on a quarter-on-quarter basis in Q4 2015.
For the whole of 2015, the rental indices of the overall industrial space, multiple-user factory space, single-user factory space, business park space and warehouse space fell by 0.8 percent to 3.3 percent.
The slide in overall industrial rents in 2015 came as no surprise given that the availability of more vacant stock has stiffened the competition for qualifying tenants, said Colliers.
Looking ahead, JTC expects 4.2 million sq m gross floor area (GFA) of factory space and 1.6 million sq m GFA of warehouse space to be completed by 2020.
With this, Colliers expects the industrial property market to witness “headwinds in 2016, as the business operating climate is expected to remain challenging, amid a jittery global macroeconomic environment, the lacklustre manufacturing sector and rising interest rates.”
Meanwhile, Dr Chua Yang Liang, JLL head of research for South East Asia and Singapore believes not all is lost since unemployment remains low “at under 2.0 percent, suggesting the attrition of labour from the manufacturing sector could have been absorbed by other sectors.”
“In addition, rapid advances in fields like 3D printing, data analytics, robotics and the Internet of Things is offering a whole new perspective of the industrial landscape. Through the continued efforts by the government to pursue better use of space, some developments vacated by traditional industrialists have undergone adaptive re-use to accommodate higher value added industries, supporting downstream clusters such as construction, carpentry, design, project management etc.”
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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