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With a lean pipeline ahead and limited speculative supply, occupancy rate for industrial properties is expected to improve.
Prices and rentals of industrial space remained relatively stable during the first quarter of 2019, revealed latest data from JTC.
In Q1 2019, the price index dipped 0.1 percent while rental index remained unchanged from the previous quarter. On an annual basis, the price index held flat while the rental index dropped 0.2 percent.
Overall, industrial property occupancy rate remained flat on a quarter-on-quarter basis but rose 0.3 percent on an annual basis, on the back of improved occupancy in single-user factory, business park and warehouse space.
But while the overall market appears to be stable, mixed signals were noted at some segments where rents fell but occupancy rates increased and vice versa, said Christine Li, head of research for Singapore and South East Asia at Cushman and Wakefield.
“While rents for single-user factories fell by 0.6 percent, the occupancy rate rose by 0.3 percentage points. Conversely, warehouse rents inched up by 0.1 percent, but warehouse occupancy declined by 0.3 percentage points,” she stated.
“The only bright spot was business parks, which saw a rental increase of 0.9 percent, while occupancy rose by 0.7 percentage points. The completion of 5 Science Park Drive which was fully pre-committed by Shopee will further bolster the business park market.”
Meanwhile, JTC noted that another 1.2 million sq m of industrial space is expected to come on-stream for the rest of 2019, of which around 80 percent is single-user factory space.
Comparatively, the average annual supply of industrial space over the last three years was about 1.4 million sq m, while demand was at 1.1 million sq m.
“With a lean pipeline ahead and limited speculative supply, occupancy rate is expected to improve,” said Brenda Ong, executive director for industrial and logistics services at CBRE.
“That said, it is still subject to the global trade uncertainties between the U.S. and China, as the heightened trade volatility continues to weigh on manufacturers’ sentiments.”
Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email fiona@propertyguru.com.sg
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