Industrial space prices, rents continued to weaken in Q2 and likely to fall further: JTC

New industrial buildings (left) stand in contrast against old industrial buildings and shophouses (right) along Upper Paya Lebar Road.
New industrial buildings (left) stand in contrast against old industrial buildings and shophouses (right) along Upper Paya Lebar Road. PHOTO: ST FILE

SINGAPORE - Prices and rentals of industrial space continued to fall along wth occupancy rates in the second quarter of this year, JTC said on Thursday (July 28).

This trend is likely to continue given oncoming supply - translating to reduced business cost for industrialists, said JTC.

Compared to the first quarter, prices and rents of overall industrial space declined by 2.3 per cent and 1.7 per cent respectively, together with a 0.7 percentage point decrease in overall occupancy rates to 89. 4 per cent.

On a year-on-year basis, prices and rents fell by about 6 per cent, in tandem with 1.6 percentage points decrease in occupancy rates.

For the next six months, about 1.6 million square metres of industrial space, which includes 320,000 sqm of multiple-user factory space, is estimated to come on-stream.

In 2017, an additional 2.0 million sqm of industrial space, which includes 490,000 sqm of multiple-user factory space, is expected to be completed. This is higher than the average annual supply and demand of around 1.8 million sqm and 1.2 million sqm respectively in the past 3 years.


GRAPHIC: JTC

"This is likely to exert further downward pressure on occupancy rates, prices and rentals," said JTC.

For companies looking to own production spaces, there were around 1,700 units, totalling 430,000 sqm, in uncompleted strata-titled developments still available for sale as at end-June, said JTC.