Industrial stock expanded by around 5.3 million sq ft in 1H2015. Major multi-user and warehouse projects completed in 2Q2015 include Bukit Batok Connection (404,000 sq ft), Mandai Connection (602,000 sq ft) and Space @ Tampines (709,000 sq ft).

Another 17 million sq ft of industrial space will enter the market in the second half of the year and 30 million sq ft in 2016. The relentless supply of industrial space continued to take its toll on rents and prices. According to JTC’s latest quarterly data, both industrial rents and prices fell by 0.7% quarter-on-quarter. Year on year, prices and rents declined by 0.9% and 2.7% y-o-y respectively.

A bright spot in the market is the business park segment. Vacancy rate for business park space dipped 2.3 percentage points from 17% in 1Q2015 to 14.7% in 2Q2015. According to CBRE, demand for business park space was mainly driven by pharmaceutical and tech firms.Latest hiring sentiment report by recruitment firm Hudson corroborated this. The healthcare and life sciences sector showed the sharpest increase in intentions to hire of all sectors, with a net 34.3% of employers looking to increase headcount in the second half of the year, up 8.7 percentage points from 1H2015.

Based on CBRE Research’s analysis, there is currently 2.93 million sq ft of future business park space due to be completed from 3Q2015 to end 2016, with almost 60% of this supply pre-commited ahead of completion.

The median monthly rent for business park space went up from $4.00 psf in 1Q2015 to $4.17 psf in 2Q2015. On the other hand, the median monthly rent for multi-user factories declined from $1.95 psf in 1Q2015 to $1.90 psf in 2Q2015.