This follows a three-year continuous decline.
This chart from Savills show that prices of 30-year leasehold industrial units continued its three year decline, falling by a further 1.1% QoQ to $333 per square feet (psf) in Q2.
Compared to other tenures, Savills reported that the decline in 30-year leaseholds was more significant because of depleting leases.
Prices of 60-year leasehold industrial units also dipped by 0.6% QoQ to $441 psf over the same period, reversing the short-lived uptick observed in the previous quarter.
In contrast, the average price of freehold industrial properties continued its seven-quarter increase to $701 psf in the second quarter. However, the pace of increase at 0.3% QoQ was the slowest since Q4 2017.
Overall, although industrial sales activity in Q2 rose by 14.6% YoY to 338 transactions, the total transaction value fell by 17.4% YoY to $435m, which the report said was possibly due to a decline in the average price of each transacted unit.
“As some industrial firms disposed of assets to improve cash flow in the face of soft business conditions, they may have sold for less than market price. This quarter also saw an absence of large transactions, as buyers’ appetites for big-ticket purchases was sapped,” the report read.
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