SINGAPORE (EDGEPROP) - The industrial market continued to improve across most segments, according to the Cushman & Wakefield industrial report for 2Q2022 released today (July 4). Based on Ministry of Trade and Industry data, the manufacturing sector expanded by 7.1% y-o-y in the second quarter, making it the top contributor to GDP growth in the quarter.

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Business park rents in the city-fringe and suburban areas, as well as factory rents, remained stable. Tight supply and low vacancy rates continued to drive up rents in other industrial segments. Prime logistics and warehouse rents showed the most significant growth in the second quarter, jumping by 2% and 1.5% q-o-q respectively.

“The flight-to-quality movement has propelled rent growth of high-tech factories, as occupiers seek newer office-like industrial spaces close to city locations to improve talent retention and corporate image,” the report says.

However, as the economy reopens and the pandemic-fuelled demand for goods is diverted to travel and leisure, “e-commerce players are adopting a watch-and-wait stance”, cautions Wong Xian Yang, head of research at Cushman & Wakefield. This is further worsened by the current macroeconomic uncertainties, Wong adds.

Wong expects the industrial market to continue a positive rental growth in the long term, underpinned by high-value manufacturing and e-commerce space demand. Demand will gravitate towards newer facilities with better specifications, incentivising landlords to redevelop and enhance assets. Capital values are anticipated to remain stable due to the limited upcoming supply and institutional-grade industrial stock.