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Buoyed by the expansion of the manufacturing sector in Q2 2016, demand for industrial property made a recovery from three straight quarters of fall, revealed a Savills report.
In the second quarter of 2016, a total of 3551 caveats were lodged for strata factories and warehouses, up 46.1 percent from the previous quarter but was still a 22.1 percent drop from the 456 deals registered in Q2 2015.
The Urban Redevelopment Authority (URA) noted that the total value of these transactions hit over S$0.6 billion, surpassing the previous quarter’s value by 76.7 percent.
Among the strata industrial developments, Win5@Yishun posted the highest sales volume with 11 units transacted at an average price of S$243 per sq ft. North Link Building@Sembawang followed close behind with 10 units transacted at an average price of S$160 per sq ft.
“Notwithstanding the increase in sales, upper-storey factory and warehouse units in the Savills basket did not show any price appreciation,” said the report.
Prices of 30-year leasehold industrial units dipped 4.2 percent quarter-on-quarter to S$368 per sq ft, while that of 60-year leasehold industrial properties inched down marginally by 0.5 percent quarter-on-quarter to S$466 per sq ft.
Given their limited supply, freehold industrial developments managed to buck the trend, with prices increasing slightly from S$688.77 per sq ft in Q1 2016 to S$688.99 per sq ft in Q2 2016.
The industrial leasing market also witnessed an increase in transactions, with rental volumes jumping 29.2 percent quarter-on-quarter to 2,285 in Q2 2016.
“This could be due to the preference to lease rather than to buy in an uncertain economy,” said Savills.
The average monthly rent for the factory and warehouse units in the Savills basket remained stable at S$1.70 per sq ft in Q2 2016.
The high-tech property sector was resilient in Q2 2016, with average monthly rents rising by 1.1 percent quarter-on-quarter to S$2.76 per sq ft, reversing the 0.42 percent drop posted in Q1 2016.
This is because high-spec industrial space is still sought-after for high-value-add industrialists due to their office-like facilities and amenities as well as significantly lower rents.
On a yearly basis, however, rents fell 4.8 percent from S$2.90 per sq ft per month in Q2 2015.
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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