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Lower demand for industrial space and a slowing manufacturing sector are the reasons for the slump.
Big ticket industrial property transactions worth more than $20 million dropped 57 percent to $424.3 million in the first quarter of 2019, reported Singapore Business Review citing an Edmund Tie & Company study.
This comes as the lower demand for industrial space and slowing manufacturing sector took a toll on the industrial property sector.
The biggest transaction registered during the quarter was a sale-and-leaseback deal involving LTH Logistics on Jurong Island worth $227.5 million, or $321 per sq ft based on gross floor area.
Despite the sector’s current conditions, the private industrial market has been stable with minor improvements in occupancy rates as net supply fell eight percent in Q1.
In fact, occupancy rates of single-user factory, business parks, multi-user factory, and all industrial spaces increased by 0.4 percent, 0.9 percent, 0.3 percent and 0.3 percent respectively.
Only warehouses witnessed a drop in occupancy rate by 0.4 percent.
Demand and supply for warehouses moved from negative to positive territory as net supply surpassed demand.
Occupancy and demand for business parks continued to grow, particularly from technology and R&D companies that do not need a presence within the CBD.
Meanwhile, rental rates held still, with some increases of between one percent and 1.5 percent seen for high-tech industrial, first-storey multi-user factory and business park spaces.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru
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