Industrial rent in most segments will moderate this year as shrinking global demand takes its toll on the local manufacturing sector, a report said yesterday.
It noted that location will be a big factor in determining how rents move, adding that factories and better-quality industrial buildings will be more affected by the coronavirus due to their outlying locations.
Real estate firm Cushman & Wakefield said the number of new leases will fall as most firms have shelved plans to relocate while renewing current leases instead.
"Businesses are unwilling to allocate any additional (capital expenditure) during this period," it noted. However, it expects warehouse rents to hold up better due to increased online deliveries.
Ms Christine Li, Cushman & Wakefield's head of research for Singapore and South-east Asia, said the controls on people movement have resulted in the unprecedented growth of e-commerce.
"Given the increased demand for delivery of online purchases of fresh food, medical supplies and general essential purchases, cold chain logistics facilities will probably register heightened leasing activity ahead," she added.
Cushman & Wakefield still noted some positive market developments in the first quarter despite the outbreak.
These include the launch of GrabFood's 6,000 sq ft cloud kitchen at Lam Soon Industrial Building, and German event organiser Deutsche Messe signing a memorandum of understanding to host its flagship manufacturing trade show in Singapore for an additional five years.
THE BUSINESS TIMES