SINGAPORE – Rents and prices of Singapore industrial developments rose for the ninth straight quarter in the fourth quarter of 2022 amid growing inflationary pressures, according to JTC Corporation’s market report released on Thursday.
Industrial space rents gained by 2.1 per cent quarter on quarter and 6.9 per cent year on year. Prices rose 1.7 per cent on the quarter and 7.5 per cent on the year.
Meanwhile, the overall occupancy rate slipped marginally by 0.3 percentage point on a quarter-on-quarter basis, and 0.8 percentage point on a year-on-year basis to 89.4 per cent.
JTC also highlighted that new completions picked up significantly in the fourth quarter, with new supply exceeding new demand. Total available stock consequently rose to 52 million sq m, up 486,000 sq m from the previous quarter – making for the largest quarterly increase since 2017.
Total occupied stock, on the other hand, rose by 268,000 sq m on the quarter.
For industrialists looking to own production spaces, about 263 units in uncompleted strata-titled developments remained available for sale at end-December 2022. These units totalled about 58,900 sq m of space, with the bulk of them located in the north, and about 35 per cent being at least 200 sq m in size. This will provide options for industrialists to site or relocate their operations to these developments.
Transaction volume, according to estimates based on caveats lodged for industrial properties, plummeted 14 per cent from the previous year.
During the quarter, JTC allocated a total of 87,700 sq m of ready-built facilities (RBF) space to industrialists. This included 55,800 sq m of high-rise space and 23,000 sq m of land-based factory space. JTC’s newer developments such as JTC Space @ Tuas and JTC Bedok Food City were among the high-rise spaces allocated.
Total RBF returns in the fourth quarter of 2022 were 76,000 sq m, of which 47,800 sq m were for land-based factory space while 19,900 sq m were for high-rise space. JTC said about 33 per cent of the total returns were due to natural expiries or companies consolidating their operations.
In the coming year, JTC expects around 1.8 million sq m of industrial space to be completed. Some 49 per cent of new supply will be from single-user factory spaces, typically developed by industrialists for their own use, noted the agency. Warehouse spaces will account for 28 per cent of the supply, while the remaining 23 per cent will be from multiple-user factory and business park spaces.
It also predicts that an additional 2.2 million sq m of industrial space will be completed between 2024 and 2026. This translates to an average annual supply of around one million sq m from now till the end of 2026.
In comparison, JTC said the average annual supply and demand for industrial space were about 800,000 sq m and 700,000 sq m respectively over the past three years. THE BUSINESS TIMES