But prices are still elevated, analysts say.
The past year marked the end of an era for Singapore’s industrial property market. After four consecutive years of breakneck price growth, islandwide industrial property prices finally succumbed to mounting headwinds and posted its first yearly drop in 2015.
Data released on Thursday by JTC showed that overall industrial prices dropped by 1.7% year-on-year in 2015, while rents fell by 2.1% year-on-year.
JTC’s data also showed that the islandwide average occupancy rate eased for the fourth consecutive year, by 0.3 percentage points YOY to 90.6% as of Q4 2015.
Despite the drop, property consultancy Colliers noted that industrial property prices remain elevated considering that the All Industrial Property Price Index (PPI) had risen by a substantial 70.9% from 2011 to 2014.
Colliers said that this demonstrated the ability of most sellers to hold on to their price expectations. In terms of leasing, rents multiple-user factory space recorded the fastest rate of decline of 3.3% YOY in 2015, after easing by 0.7% YOY in 2014.
Colliers noted that the continued slide in overall industrial rents in 2015 was unsurprising – considering that the islandwide average occupancy rate for industrial space remained under pressure in 2015.
“The industrial property market is expected to experience headwinds in 2016, as the business operating climate is expected to remain challenging, amid a jittery global macroeconomic environment, the lacklustre manufacturing sector and rising interest rates,” Colliers said.
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