Prime logistics properties up by 3% in Q1 2022
Except for outlying business park space, steady rental increases were seen.
Prime logistics properties rose by 3% quarter-on-quarter in the first quarter of 2022 as steady rental increases were observed across the board, global commercial real estate firms, Cushman & Wakefield, said in its report.
Aside from this, high-tech properties also reported stable growth during the same period.
Rents of factories also increased gradually in the first three months of 2022 following relatively tight vacancy rates as the bulk of supply is expected to come onstream in the latter part of the year. City business parks also continued to experience steady growth amidst tight vacancy.
However, outlying business parks rents declined during the quarter as vacancy rates remain elevated.
Broad-based growth in rents is expected across different types of industrial properties in 2022 even as there are rising downside risks.
Rents for business parks in both city fringe and outlying areas are expected to grow in 2022 with business parks rents experiencing a higher growth rate due to limited supply.
Wong Xian Yang, research head at Cushman & Wakefield Singapore, said that there will be continued healthy demand for high-tech, prime logistics, and warehouse properties because of ongoing expansion from the biomedical, technology, manufacturing, and logistics sectors. This was amplified by the exponential growth in e-commerce and business digitalisation.
“Ample supply of factory space coming onstream this year could add downward pressure on occupancy rates. Nevertheless, overall factory rents are still expected to rise in 2022, albeit at gradual rates as continued expansion in the manufacturing and logistics sectors would underpin healthy demand for factory space,” he added.