Multi-user space will be hard-hit.
Industrial landlords will grapple with steadily lower rents this year as businesses brace for slower economic growth.
According to Colliers, a more difficult business operating climate means that industrialists will be cost-sensitive and cautious when it comes to real estate leasing this year.
Coupled with the availability of ample space options in the market, rents for prime multi-user conventional industrial space are projected to dip by up to 2.0% in 2016.
However, rents for multi-user high specs premises could register some upside in 2016, as the new developments completing during the year are expected to be able to command higher rents.
As such, for the whole of 2016, the average islandwide business park rent could appreciate by up to 3.5%, while rents for independent high specs premises could rise by up to 1.0%.
“In light of the challenging business operating environment, industrialists kept a tight rein on total business costs – of which real estate is a component – and took longer to review their space requirements in Q4 2015. The quantum of leasing deals fell for the second straight quarter in Q4 2015,” Colliers noted.
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