Rents for modern high spec warehouses expected to rise in 2023
It will be underpinned by industries such as logistics and food.
Despite the global economic issues, property expert, Savills, are seeing local industrial and warehouse rents are expected to increase next year.
Savills cited in its latest report said the Singapore economy will slow down amidst tightening of global situation and restrictions in some countries that will impact trade-related sectors.
There will also be a manufacturing slowdown, which will make more industrialists become cautious in their expansion plans.
But demand for industrial spaces, especially modern high specification warehouses, and hi-spec industrial and business parks with excellent connectivity and amenities will be backed by growth industries including logistics, food, precision engineering and biomedical sectors.
Savills said rents for prime warehouse and logistics properties are expected to rise by 5.0% year-on-year for each year in 2022 and 2023.
“Although rental growth for prime multiple-user factory spaces is forecast to moderate to 5% YoY in 2023, it is likely to see high growth for new food factories which are expected to complete next year,” it added.
Pressure on warehouse rents
With the rise in service charges, Savills said rents are seen to continue on an upward trend as landlords pass on higher business costs to tenants.
There is a dearth of supply of warehouse space after 2024 when no significant new supply is projected to come on stream.
“This could put further upward pressure on warehouse rents,” said Savills.