COTD: Industrial sales volume in Q3 rises after Fed rate cut

The rising manufacturing activity may also drive industrial property sales.

Industrial property sales activity in Q3 surged, with the total sales value growing 199.6% QoQ and 205.6% YoY to reach $3.1b from a total of 456 transactions, data from Knight Frank revealed.

During the period, the average leasing price for multiple-user factories was approximately $500 per square foot (psf), whilst warehouses averaged around $300 psf, and single-user factories were below $200 psf.

In August, large sale transactions took place as investors grabbed deals expecting interest rate cuts and a return of positive carry.

Notable transactions include the sale of a $1.6b portfolio of seven industrial properties by Lendlease and Warburg Pincus from a portfolio owned by Blackstone and Soilbuild, the 51% stake sale of 20 Tuas South Avenue 14 for $444.6m by ESR LOGOS REIT, and the 49% stake sale of Elementum for $272.0m to a sovereign wealth fund from Brunei.

In addition to the recent Fed rate cut, Knight Frank also expects the increase in manufacturing activity to drive demand and result in increased sales volume of industrial properties.