SINGAPORE - Sluggish economic growth prospects and an unexpectedly poor showing by the manufacturing sector dampened demand for factories and warehouses in the second quarter, property consultancy DTZ said in a report on Wednesday.
However, newer business park and high-tech industrial space still saw keen interest from tenants, it said.
Rents and prices for conventional industrial space remained unchanged in the second quarter from the previous three months, based on a basket of properties DTZ tracked.
It found that the average rent for ground-floor space was $2.20 per sq ft (psf) per month in April through June, while rent for upper storeys was $1.80 psf per month on average.
The price of ground-floor space also held steady at $627 psf in the period, while that of upper-storey space was $470 psf.
DTZ's Southeast Asia research head Lee Lay Keng said that the recent completion of several multi-user factories had "crowded the market, creating competition among landlords".
The picture was different for business park and high-tech industrial space, where rents have risen overall due to solid leasing demand.
Business park rents climbed 2.5 per cent to $4.90 psf per month in the second quarter from the first, while rent for high-tech industrial space grew 1.6 per cent in the period to $3.20 psf per month.
Increasing rents in the office sector have driven some "cost-conscious" office tenants to relocate to business parks or high-tech industrial space, DTZ said.
Companies that are moving from offices to high-tech industrial space include Roche Diagnostics and Intel, which will be relocating to the recently completed Aperia development in Kallang, it noted.