Singapore's industrial rents, prices up in second quarter

The year-long construction delays in Singapore's industrial property market are beginning to see an end. In the second quarter of the year, total available stock increased by 374,000 sq m compared with the first quarter, the largest quarterly rise since 2017. By the end of the third month in the second quarter, there was 50.5 million sq m of industrial space.

According to data released by JTC yesterday, prices of industrial properties gained 1.8 per cent quarter on quarter, while rentals edged up 0.6 per cent in the second quarter. Prices and rents are up 1.6 per cent and 0.3 per cent respectively compared with the previous year.

Meanwhile, occupancy rate inched up by 0.1 percentage point quarter on quarter and 0.7 percentage point year on year to 90.1 per cent as new completions start to catch up with persisting delays.

Mirroring the first quarter, multiple-user factories was the only segment seeing quarter-on-quarter growth in occupancy rate, rising 0.7 per cent. But this was almost offset by business parks and warehouses, which slipped 0.3 per cent and 0.1 per cent respectively, as increases in supply outpaced new demand. Occupancy rate for single-user factories remained unchanged in the second quarter.

During the quarter, JTC allocated a total of 103,100 sq m of ready-built facilities (RBF) space to industrialists, which included 66,900 sq m of high-rise space and 23,700 sq m of land-based factory space.

Total RBF returns in the second quarter were 44,500 sq m, of which 30,200 sq m was high-rise space and 8,600 sq m was land-based factory space. According to JTC, about 52 per cent of the total returns were due to natural expiry or companies consolidating operations.

The industrial land and infrastructure agency expects a further increase in industrial space supply. Based on approved plans as at end-June, an estimated 1.7 million sq m of industrial space are set to be completed by the end of the year.

"Between 2022 and 2024, an additional 3 million sq m of industrial space is expected to be completed. This amounts to an average annual supply of about 1.4 million sq m from now until end-2024. As a comparison, the average annual supply and demand of industrial space were around 0.7 million sq m and 0.8 million sq m respectively over the past three years," JTC said.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on July 23, 2021, with the headline 'Singapore's industrial rents, prices up in second quarter'. Subscribe