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Around 22.2 million sq ft of private industrial space is forecasted to enter the market by Q4 2018 to 2022, according to an Edmund Tie & Co report.
For the first nine months of 2018, about 4.81 million sq ft were completed, and another 10.76 million sq ft are expected to come online for the whole of 2019, based on statistics from OCBC Investment Research.
“To put things in perspective, over the past three years, the average annual demand and supply were 12.92 million sq ft and 17.22 million sq ft respectively,” it said.
Out of the 22.2 million sq ft of private industrial space, Edmund Tie revealed that 68 percent are owner-occupied. These consist of single-user industrial projects, as well as additions, extensions and alterations to existing developments.
It pointed out that warehouses would account for the largest proportion of supply in 2020, while single-user and mutiple-user industrial projects will comprise the entire inventory for 2021. But come 2022, supply is expected to plummet to less than one million sq ft from nearly 10 million sq ft in 2020, and come solely in the form of multiple-user industrial developments.
“Industrial rents for multi-user factory space are likely to face some downside risks, especially in the manufacturing sector, which could be negatively impacted by the ongoing US-China trade war as well as the slowing mainland Chinese and global economies,” said Edmund Tie.
Meanwhile, the appetite for high-tech premises and business parks is anticipated to remain strong, particularly those in good locations, with convenient access to amenities and transportation nodes, as well as those situated in the city’s outskirts.
“With the expansion of Google’s third data centre and Facebook investing $1.4 billion to build its first data centre in Singapore, demand for data centres is likely to continue, with Singapore well-positioned as a regional hub to accommodate these specialised centres,” it added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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