Industrial rents, prices will continue to decline: 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 rents of industrial space in Singapore continued to fall in the fourth quarter last year and will likely weaken further this year as more supply of such space hits the market, said JTC.

The state industrial landlord said overall rents declined by 0.5 per cent in three months to December from the third quarter, while prices slipped by 3 per cent over the same period.

For the full year, industrial prices fell by 9.1 per cent and rents declined by 6.8 per cent, JTC added in a report on Thursday (Jan 26).

JTC sees rents and prices continuing to fall with the larger supply in the pipeline.

It said the total stock of industrial space rose by 1.8 million square metres last year. Another 2.4 million sqm - including 548,000 sqm of multiple-user factory space - is likely to come on-stream this year.

This is higher than the average annual supply and demand of around 1.8 million sqm and 1.3 million sqm respectively in the past three years, said JTC.

"This is likely to exert further downward pressure on occupancy rates, prices and rentals, translating to reduced business cost for industrialists," JTC said.

Meanwhile, occupancy rate for overall industrial property market rebounded slightly, up by 0.4 percentage points to 89.5 per cent in the fourth quarter.

It attributed the uptick in occupancy to industrialists moving into developments which were completed in the past few quarters.

However, it noted that occupancy rate was still down by 1.1 per cent when compared against the previous year.

JTC said it will monitor the industrial property market closely to ensure a stable and sustainable supply of land an space to support the needs of businesses.

"JTC will continue to develop new industrial facilities that will meet the needs of industrialists, support their transformation and upgrading, and enhance their productivity and competitiveness," it added.