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COMMERCIAL PROPERTY | Staff Reporter, Singapore
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Chart of the Day: Everything wrong with the industrial property market in one scary chart

Supply is far higher than demand.

This chart from CBRE painfully illustrates the problem that industrial landlords are facing. Industrial land supply, excluding business parks, is forecasted to surge in the next three years, while demand is steadily softening on back of slowing growth.

The report added that the surge in supply corresponds to twice the amound of the 10-year average demand of 10.42 million square feet.

"The softening is primarily attributed to three main factors--hike in labour costs, rising competition from neighbouring countries that offer an alternative cheaper manufacturing base and weakening external demand from Asian economies, especially China," said CBRE.

Supply has surpassed demand since 2013, CBRE noted, while a strong supply of industrial space is expected to come on stream in 2015 and 2016.

"In the face of decelerating economic growth and contracting industrial output, it is likely that demand for industrial space will remain subdued in the near term," CBRE said.

 

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