SINGAPORE(THE BUSINESS TIMES) – In line with the economy’s broad recovery, rents and prices of industrial space in Singapore rose for the fourth straight quarter, while delays in completion persisted.
Occupancy in the July-September period was flat over the previous quarter at 90.1 per cent, although it improved by a mild 0.5 percentage point on a year-on-year basis, according to JTC Corp’s latest market report on Thursday (Oct 28).
The rental index of all industrial properties rose 0.7 per cent from the second quarter. Year on year, rents grew 1.9 per cent.
Meanwhile, the overall price index inched up by 0.1 per cent quarter on quarter, but climbed 3.9 per cent from the year-ago period.
This also came as more industrial properties changed hands. Based on caveats lodged, the latest three months saw around 411 transactions, up 15 per cent from 358 deals in the second quarter and jumping 28 per cent from the 320 deals for the same period a year ago.
Total available stock of industrial space expanded by 228,000 square metres (sq m) in the July-September period, slowing from the quarterly growth of 374,000 sq m growth in the April-June quarter.
As for the upcoming supply, about 900,000 sq m of new industrial space could be completed in the last quarter of this year, based on approved plans as at end-September 2021, JTC said. Of this, some 45 per cent will be single-user factory space, which is typically developed by industrialists for their own use.
Multiple-user factory space will make up 39 per cent of the upcoming supply, and the remaining 16 per cent will comprise warehouse and business park space.
Between 2022 and 2024, an additional 3.6 million sq m of industrial space is expected to be completed, JTC said.
This amounts to an average annual supply of about 1.4 million sq m from now till end-2024, which is higher than the average of 700,000 sq m over the past three years.
The industrial land and infrastructure agency noted that demand for industrial space is projected to grow as the economy continues to recover.
However, any potential rise in occupancy may be tempered by new completions, although this increased supply will depend on the delays in expected completions, JTC added.
“Prices and rentals of industrial spaces are likely to remain stable, with positive upsides in the near future if the economy recovers strongly,” it said.
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