SINGAPORE (EDGEPROP) - A Savills Singapore research found that the average monthly rent for high-spec industrial space was $3.69 psf in 3Q2022. This is a 1.1% quarterly increase and matches the recorded q-o-q growth in 2Q2022. The rental price has risen since Savills started collecting this data in 2012.

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“Demand for industrial spaces, especially modern high specification warehouses, as well as high-spec industrial and business parks with excellent connectivity and amenities will still be underpinned by growth industries such as the logistics, food, precision engineering and biomedical sectors,” says Alan Cheong, executive director of research at Savills.

The pick-up in high-spec industrial rents is in line with the overall increase seen across the industrial sector, with warehouse and logistics properties recording a quarterly increase of 1.4% in 2Q2022 to 2.8% in 3Q2022, where average rents stood at $1.51 psf.

Based on a basket of industrial properties tracked by Savills, the prices for 60-year leasehold and freehold industrial properties rose by 1.2% q-o-q to $463 psf and $758 psf, respectively. “Apart from the longer remaining tenure and nature of freehold leases, the rise in prices was driven by the strong price growth for food factory properties,” the Savills report adds.

Next year, industrial rents are expected to increase, coupled with the rise in service charges, and the upward momentum in rents will continue as landlords pass on higher business costs to tenants, says Cheong.

The consultancy expects rents of prime warehouse and logistics properties will rise 2% to 5% y-o-y for each year in 2022 and 2023. Meanwhile, multi-user factories may moderate from 10% to 12% y-o-y increase in 2022 to 4% to 6% in 2023.