Industrial sales down 11.6% QoQ in Q1 23: Knight Frank

The quarter closed with a total sales of $799.4m.

Softening business expectations led to the decline of industrial sales, which went down 11.6% quarter-on-quarter (QoQ) to $799.4m in the first quarter of 2023, Knight Frank said in its report.

The property expert noted that there were large deals including the transactions of four properties by Cycle & Carriage to M&G Real Estate for $333m and the J’Forte Building that was sold to Boustead Industrial Fund for almost $100m.

Apart from these, about 97.3% of the caveats lodged during the quarter were for deals of $10m or lower.

Leasing activities were also subdued in the first two months of 2023 but rents boosted slightly across all property types. The islandwide leasing volume for multiple-user factories fell 1.5% QoQ to 1,548 tenancies in January and February 2023 compared to the first two months of the final quarter of 2022, but the median rent improved 4.7% QoQ to $2.01 psf pm.

"Whilst the electronics sector is going through a challenging period, demand remains undergirded by transport engineering and the recovering travel sector, as well as for industrial activities that support the construction sector and the development of Singapore’s sustainable energy infrastructure," said Knight Frank.

Meanwhile, business parks are improving compared to other industrial property types this quarter. Islandwide, the total number of business park leasing deals increased 66.7% to 70 tenancies for January and February 2023, compared to the two months of October and November 2022, with a majority in the Central Region due to a strong preference for accessibility.

Additionally, median rents of business parks went up 1.4% QoQ to $4.22 psf pm, with some of the demand stemming from life sciences.

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