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The decline in industrial rents and prices here appears to have eased last quarter, based on JTC’s latest Singapore Industrial Properties Quarterly Market Report.
In Q4 2017, overall rents fell by 0.1 percent on a quarterly basis and 2.8 percent year-on-year. These are both lower than the respective drops of 1.1 percent and 3.2 percent during the prior quarter.
Specifically, the warehouse segment posted the largest annual rental drop of 5.7 percent, followed by multi-user factories (-2.8 percent) and single-user factories (-2.6 percent). On the other hand, business parks bucked the trend with a 3.3 percent year-on-year rental growth.
Meanwhile, prices of industrial properties decreased by 1.1 percent quarter-on-quarter and 5.7 percent on an annual basis in Q4 2017. While the former is slightly higher than the 0.9 percent fall, the latter is lower than the 7.4 percent year-on-year drop in the third quarter.
In particular, single-user factories posted the biggest yearly decline in prices of 7.1 percent, while multi-user factories witnessed a 4.8 percent drop.
However, the overall occupancy rate of industrial properties in Singapore declined by 0.6 percentage points (pp) to 88.9 percent in Q4 2017 on an annual basis.
Multi-user factories (86.5 percent) posted the largest drop of 0.8pp. This is followed by single-user factories (90.2 percent) with a 0.7pp dip and warehouses (89.1 percent) with a 0.6pp fall. On the other hand, that for business parks rose by 3.6pp to 86.6 percent.
Looking ahead, 1.6 million sq m of industrial space are expected to be completed this year, including 361,000 sq m of multiple-user factories. While this is slightly higher than the demand of around 1.3 million sq m per annum over the past three years, supply in the next few years is forecasted to ease.
“Prices and rentals of industrial properties continued to moderate (in Q4 2017). As new supply starts to taper in the coming years, prices and rentals may start to stabilise in tandem with occupancy rates,” JTC added.
This article was edited by Keshia Faculin.
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