Chart of the Day: Factory tenancies climbed 2% YoY to 1,635 units

But demand is expected to remain soft brought by the weakening manufacturing sector.

This chart from Knight Franks shows that the number of factory tenancies rose 5.2% YoY to 1,635 units whilst warehouse units dipped 2.6% YoY to 137 from April to May.

But despite the increase in tenancies, the report said that demand for industrial spaces may still remain soft on the back of weakening manufacturing sector.

Industrial rents are also projected to fall 2% by end-2019. However, it stated that demand from transport engineering and medical equipment segments, and the lower supply in the pipeline, should keep the rental decline in check.

Meanwhile, Knight Frank added that approximately 50.6 million sqft of industrial space could be added to the supply pipeline from Q2 2019 to 2023. 13.3 million sqft of this is slated for completion by the year-end, which was lower than the 5-year average new completion of 17.0 million sqft from 2014 to 2018.

Upcoming supply expected supply by end-2019 includes 0.8 million sqft of multiple-user factory space and 10.7 million sqft of single-user factory space. A total of 1.6 million sqft of warehouse space is slated for completion between Q2 and Q4 2019.