Business park and high-tech industrial rents outpaced those at conventional industrial space in the first quarter this year, property consultancy DTZ Research said in a report on Monday.
While conventional industrial space rents held up in the quarter due to manufacturing sector expansion, they may be weighed down by more new supply being completed, DTZ said. It added that business park rents are expected to grow further this year.
Average gross rents for business park space climbed 2.1 per cent to $4.80 per sq ft (psf) per month in January through March from the preceding three months. High-tech industrial space rents grew 1.6 per cent to $3.15 psf per month over the period.
However, conventional industrial space rents stayed flat in the first quarter. Rents on the first floor commanded $2.20 psf per month and upper floors were $1.80 psf per month.
This was partly due to a large supply of new strata industrial units being completed late last year that are likely to be held by investors trying to rent them out, DTZ said.
Strata industrial projects completed in the fourth quarter last year include Soilbuild's Northspring Bizhub, Oxley Group's The Commerze @ Irving, 8B @ Admiralty by Ascendas and Bartley Biz Centre by Soon Hock Group.
Conventional industrial space prices also remained unchanged in the quarter at $627 psf for first-floor space and $470 psf for upper floors, though DTZ research head Lee Lay Keng noted that some industrial projects saw price drops.
These projects tend to have shorter leasehold tenures which makes them
generally harder to sell as they age", she said in the report.
As for the business park sector, demand for newer and better-quality buildings has picked up, she said, noting that developments such as Mapletree Business City, One@ Changi City and Solaris are running at close to full occupancy even though the islandwide occupancy rate for business parks is estimated at 82 per cent.
About 4.7 million sq ft of business park space is expected to be completed between this year and 2016, out of which around half is either build-to-suit or precommitted, DTZ said.