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The number of tenancies from April to May dropped to 1,253, 43.5% lower compared to the same period last year.
Singapore saw median rent of multiple-user factory spaces held steady at $1.78 per sq ft per month (psf pm) in the second quarter of 2020, from the previous quarter and over the same period last year, revealed Knight Frank.
Leasing volume, however, fell 43.5% year-on-year, with the number of tenancies from April to May dropping to 1,253. The figure represented a total rental volume of $2.5 million.
“The circuit breaker in Q2 2020, the reduction in manpower as well as manufacturers putting off any expansion or relocation plans due to existing headwinds contributed to the lack of leasing activities,” said Knight Frank.
The median prices of multiple-user factory spaces also registered slight declines or remained flat during the quarter under review.
Although prices were generally stable, transaction volume fell to $62 million in Q2 2020 from $168.6 million in Q1 2020, “due to the restriction of activities and a rise of economic uncertainties during the circuit breaker”.
Looking ahead, Knight Frank noted that the road to recovery will not be immediate. It expects industrial space users to take a cautious stance in “expanding their physical space requirements until such time when economic improvement is more certain”.
As such, it expects industrial rents and prices to come under some pressure and to moderate downwards by around 5% this year, given the upcoming supply for this year as well as the bleak economic outlook both globally and domestically.
“As at Q1 2020, some 54.1 million sq ft gross floor area (GFA) of industrial space is slated to come on stream from Q2 2020 to 2024. Of these, about 41.7% of the upcoming developments are projected to be completed in 2020, with the majority comprising factory space,” said Knight Frank.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg