Prices and rentals of industrial space fell year on year in the second quarter and will continue to see downward pressure in the coming quarters due to the pandemic, said industrial land and infrastructure agency JTC Corp.
Prices of industrial space declined by 1.7 per cent year on year and 1.1 per cent quarter on quarter, while rents came down by 0.8 per cent year on year and 0.7 per cent quarter on quarter.
Occupancy rates bucked the trend by edging up 0.1 percentage point year on year and 0.2 percentage point quarter on quarter to 89.4 per cent, lifted by single-user factory and warehouse space. This stemmed from pre-commitments and stockpiling and storage. But occupancy rates for multiple-user factories and business park space fell.
Highlighting that the data might not have fully captured the economic impact of Covid-19, JTC said: "Some transactions were pre-committed before the circuit breaker measures, and there was a relative lack of recent market transactions."
JTC also flagged that most construction activities were halted due to the circuit breaker and some project owners could not provide complete assessments on construction progress. For statistical compilation and reporting, the expected completion periods for such projects were extended by three months from the original expected completion period.
As of end last month, around 1.3 million sq m of new industrial space is expected to be completed in the second half of this year, while only 0.2 million sq m of new industrial space was completed in the second quarter. This suggests new industrial space will not meet the earlier projection of 2.1 million sq m for this year.
JTC said: "We can expect further delays in completion for some industrial building projects, as project owners and contractors adjust to meet the Building and Construction Authority's Safe Restart requirements."
For industrialists looking to own production spaces, there were 147 units totalling about 74,000 sq m in uncompleted developments available for sale at the end of the second quarter this year.
THE BUSINESS TIMES