Singapore industrial rents and prices fall for second straight quarter: JTC

Industrial buildings and shophouses (right) along Upper Paya Lebar Road.
Industrial buildings and shophouses (right) along Upper Paya Lebar Road.PHOTO: ST FILE

SINGAPORE - Industrial property rents fell for a second straight quarter, according to JTC Corporation's third quarter report on the sector released on Thursday (Oct 22).

Rents of all industrial space in the third quarter fell 0.8 quarter on quarter and fell 1.6 per cent from a year ago.

Rents of multiple-user factory space fell by 1.1 per cent from the second quarter and fell 1.9 per cent from a year back.

"The decrease in the rental indices contrasts with the average annual increases of around 3 per cent in the past four years," JTC said.

Prices were also down, shedding 0.3 per cent compared with both the second quarter and a year back.

Prices of multiple-user factory space fell for a second straight quarter as well. They were down 0.4 per cent from the second quarter and 0.8 per cent from a year ago.

JTC said this contrasts with the average annual increase of 8 to 9 per cent over the past four years.

Occupancy rate of the overall industrial property market fell by 0.2 percentage points from the second quarter to 90.8 per cent.

"A 1.0 per cent increase in supply outstripped a 0.8 per cent increase in demand," JTC noted.

Compared with a year back, occupancy rate was 0.1 percentage points lower.

Another roughly 3.8 million square metres of industrial space will be completed in the fourth quarter and next year, JTC noted. This includes about 810,000 sqm of multiple-user factory space.

"This is significantly higher than the average annual supply and demand of around 1.6 million sqm and 1.2 million sqm in the past three years, and is likely to exert further downward pressure on occupancy rates."

Prices and rents have softened following the increase in supply of industrial land and space in recent years, it added.

"With a large supply coming on-stream over the next few years, there will be a wide range of options for industrialists planning to expand their operations," said JTC.