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Average monthly industrial rents dipped 0.4%; warehouse rents increased 0.7% and business park rents declined 1.2% half-on-half.
Singapore’s industrial property market remained resilient in the first half of 2021, with the JTC price and rental indices rising 2.7% half-on-half (HoH) and 1.1% HoH, respectively, said Colliers International in its latest report.
Colliers’ research showed that average monthly industrial gross rents dropped 0.4% HoH in H1 2021 as supply increased 8.5x HoH.
Warehouse rents increased 0.7% HoH to $1.22 per sq ft (psf), while business park rents declined 1.2% HoH after emerging as the most resilient segment last year.
Meanwhile, total net absorption increased 58.4% HoH to 5.5 million sq ft in H1 2021 even as supply surged 8.5x HoH.
For the whole of 2021, Colliers expects the industrial sector to continue its recovery along with the overall economy, with warehouse rents forecasted to climb 1.3% year-on-year (YoY), or the highest among all segments.
“Business park and factory rents could rise at a slower rate of 0.5% YOY and 0.7% YOY respectively given ample supply, and we expect rents of hi-specs space to grow 0.8%, supported by Singapore’s growing technology sector,” said Raphael Lee, Associate Director of Industrial Services at Colliers International.
He noted that planned supply for this year “remains high at 1.6x the 10-year historical average, 69% of which comes from factories, although construction delays could potentially avert an oversupply situation”.
Colliers also revealed that investor demand for industrial properties remained strong, particularly for factories, hi-specs space and warehouses.
“There were a few major deals transacted in H1 2021, and single-user factory transactions surged 214% HoH by value,” said Donald Goh, Director of Investment Services at Colliers International.
Colliers Valuation and Advisory Services team shared that cap rates for industrial properties in Singapore remained unchanged during the period under review at 5.75% to 6.25%.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
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