Demand for higher specification industrial assets to back industrial market
Manufacturing, logistics, biomedical, and food sectors will drive demand.
Manufacturing output, PMI, and exports all posted contractions in the first quarter of 2023 which was largely attributable to the slow semiconductor manufacturing and macroeconomic uncertainties. Changing consumer behaviour had also led to softer demand for e-commerce players.
These will act as speed bumps to slow down rental and price growth in the coming quarters, Colliers, said in its recent report.
But will this decline in demand for industrial properties? Colliers said demand for higher specification industrial assets will continue to support the industrial market, underpinned by demand from industries such as the advanced manufacturing, logistics, biomedical, and food sectors.
Trade tensions have also resulted in industry players looking to fortify supply chains, with some eyeing to set up shop in Singapore, which will help to boost industrial demand.
As the backlogged supply comes on stream this year, new supply will outpace new demand and lower occupancy levels.
“With a remaining supply of 10.3 mil sf in 2023, and an average of 10.9 mil sf from present till 2025, higher supply will continue to moderate rental and price growth but may also provide more options for occupiers,” said Colliers.