SINGAPORE (THE BUSINESS TIMES) - Prices and rents of industrial space in Singapore fell slightly in the first quarter of this year, while occupancy remained flat, but the data does not capture the full impact of the Covid-19 outbreak, said industrial land and infrastructure agency JTC Corp.
As the pandemic continues to evolve, there would be downward pressure on prices and rentals in the coming quarters, as well as potential delays in project completion, JTC said.
The price index declined 0.4 per cent quarter on quarter, while the rental index dipped 0.1 per cent. Meanwhile, the occupancy rate for industrial space held at 89.2 per cent.
Compared with a year ago, the price index fell 0.7 per cent, while rents were flat and the occupancy rate dipped 0.1 percentage point.
JTC said: "The Q1 2020 statistics reflected market conditions from January to March 2020, before the circuit-breaker measures kicked in on April 7. Further, many of these transactions could have been pre-committed pre-Covid. This is in line with historical trends of past economic events such as the Global Financial Crisis in 2008, where impact on industrial prices and rentals only started to show in the following quarter."
The circuit breaker will bring delays in completion for some projects given that construction activities have been halted until June 1. Between Q2 2020 and Q4 2020, about 2.1 million square metres (sq m) of industrial space were originally slated for completion as at end March, but this will likely be delayed, JTC said. About 37 per cent of the supply is single-user factory space, while multiple-user factory space accounts for another 40 per cent of the supply.
JTC also said that based on the number of caveats lodged for industrial properties, transaction volumes in Q1 2020 fell by 29 per cent quarter on quarter and 38 per cent from a year ago.
For industrialists looking to own production spaces, there were about 150 units in uncompleted developments available for sale at the end of Q1 2020. These units totalled less than 75,000 sq m.