Rentals and prices of industrial space in Singapore remained largely stable in the first quarter of this year compared with the previous quarter, according to data from JTC Corp.
In 1Q2019, the price index of all industrial space dipped 0.1% q-o-q but was unchanged y-o-y, while the rental index was unchanged q-o-q but decreased by 0.2% y-o-y.
Rentals and prices of industrial space in Singapore remained largely stable in 1Q2019
“Amid an uncertain external environment, firms are unlikely to be willing to pay rents above prevailing market rates, and with sufficient supply in the pipeline, industrialists need not commit too much space for future expansion,” says Tan Boon Leong, head of industrial at Knight Frank Singapore.
Overall, the occupancy rate of industrial space in 1Q2019 was stable q-o-q, but increased 0.3% y-o-y to 89.3%.
According to JTC, transaction volume in 1Q2019 increased 7% q-o-q and 41% y-o-y.
At the end of 1Q2019, there were about 150 units in uncompleted developments available for sale totalling some 742,716 sq ft of space.
For the rest of the year, JTC Corp estimates another 12.9 million sq ft of industrial space to come on-stream, of which 80% comprises single-user factory space. In the past three years, the average annual supply and demand of industrial space were around 15 million sq ft and 11.8 million sq ft respectively.
While 2019’s supply could more than double from 2018’s net addition of around 5.9 million sq ft, Tay Huey Ying, JLL’s head of research and consultancy, expects occupier demand to remain healthy despite macro-economic challenges.
“Industrial developments with higher building specifications catering to the needs of new economy firms [such as] technology companies and firms from higher value-added industries should remain sought after,” she says.
Meanwhile, Cushman & Wakefield (C&W) highlights that the contraction of Singapore’s manufacturing GDP in 1Q2019 by 1.9%, based on advance estimates from the Ministry of Trade and Industry, could weigh on the industrial sector.
“This represents the first quarterly y-o-y contraction since 1Q2016. On a q-o-q seasonally-adjusted basis, the contraction was more severe at 12%,” says Christine Li, C&W’s head of research, Singapore and South East Asia.