Property prices dipped 3.6%, whilst rents fell 2%.
According to JTC, the prices and rentals of industrial space remained relatively stable. Property prices dipped 3.6%, whilst rents fell 2%. Multiple-user factory space prices fell 3.2%.
Based on the number of caveats lodged for industrial properties, transaction volume showed signs of stabilisation in 1Q2018, rising by 1.2% QoQ and 15% YoY.
Christine Li, senior director and head of research at Cushman & Wakefield (C&W) Singapore, commented, “The first quarter data is somewhat encouraging in the sense that rental decline has been rather muted, and is almost flat for the quarter.”
Li also noted that in other segments such as business park, rents staged a stronger recovery at 2.4% QoQ, faster than the 2% increase in the previous quarter. “This is mainly due to the dearth of business park supply, where there was no new completion during the quarter. Demand could be sustained for business park in the short to medium term, as the office rental has been on the rise, which will continue to encourage cost-conscious occupiers to take up business park spaces as the premium for office rents rises,” she added.
She also said that this could underpin the take-up rate for the upcoming Alice@Mediapolis by Boustead, which will be completed by the fourth quarter of 2018.
Meanwhile, JTC also indicated that in 2018, 1.4 million sqft of supply is set to be completed, whilst 3.1 million sqft will follow in the next years. This includes 236,000 sqm of multiple-user factor space.
As a comparison, the average annual supply and demand of industrial space in the past 3 years were around 1.7 million and 1.2 million sqm respectively. “As new supply starts to taper in the coming years, prices and rentals should stabilise in tandem with occupancy rates,” JTC said.
For industrialists looking to own production spaces, around 570 units in uncompleted strata-titled developments remained available for sale at the end of Q1. “These units totalled about 146,000 sqm of space, and will provide options for industrialists to site or relocate their operations in these developments,” the company added.
Meanwhile, overall occupancy rate edged up 0.4% YoY to 89%. For multiple-user factory spaces, occupancy rate dropped by 0.5 ppt YoY. Li commented that this “is a good sign that some of the sectors such as single user factory.”
“As new supply starts to taper in the coming years, prices and rentals should stabilise in tandem with occupancy rate,” JTC said in its outlook.
According to Li, Singapore has emerged as an attractive location for firms to site their innovation hubs in Asia Pacific. “During the quarter, American agribusiness company Archer Daniels Midland unveiled its food innovation centre at Biopolis to develop flavours and speciality ingredients for F&B manufacturers in the region. Meanwhile, confectionary giant Mondelez International launched its R&D hub in Jurong to develop new products and technologies for its gum and candy brands. In addition, German gas and engineering firm Linde Group unveiled its Asia Pacific Digitalisation Hub to accelerate the incorporation of data analytics and machine learning algorithms into its production processes,” she concluded.
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