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Singapore was ranked 4th in the world’s most expensive place to rent prime logistics space last year, according to the latest report from CBRE.
As of Q4 2015, annual prime logistics rents in the city-state stood at US$10.91 per sq ft, behind Hong Kong (US$ $28.94), Tokyo (US$16.74) and Shanghai (US$16.36).
“Singapore’s unique location in the heart of South East Asia, its sound infrastructure and expertise in the logistics sector has attracted the attention of global logistics providers, mainly the third party logistics firms,” said Desmond Sim, CBRE’s research head for Singapore & Southeast Asia.
“These firms use Singapore as a base to access the multiple markets around the region. Together with the increased demand for the outsourcing of logistics services, we expect the outlook for prime logistics in the republic to remain robust,” he added.
In fact, 41 of the top 50 global logistics providers have either established their headquarters for the Asia Pacific (APAC) region in Singapore, or designated it as a choice location for their expansion and upgrading.
For instance, Kuehne+Nagel opened its 540,000 sq ft Singapore Logistics Hub earlier this year, while DHL inaugurated its Advanced Regional Centre in late-2015 with an area of nearly 1 million sq ft.
Hankyu Hanshin is also building a Regional Logistics Hub at Jalan Buroh with a gross floor area (GFA) of around 515,000 sq ft, while Toll Group is developing its 1.09 million sq ft Toll City Logistics Hub in Tuas.
Notably, prime logistics space refers to high-quality premises with better specifications in good locations that are intended for companies that store and transport goods to customers.
To be classified as such, they must be larger than 100,000 sq ft, have a ceiling height greater than 23 to 36 ft and the ratio of office to industrial space does not surpass 10 percent. Another key requirement is that the building must be purpose-built for logistics and distribution while manufacturing facilities are excluded.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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