Industrial rent and price growth to slow down after strong Q1

In Q1, rents and prices grew 1.0% QoQ, and 3.1% QoQ, respectively.

The growth of industrial rents and prices might slow down in the next quarter after posting its "strongest quarterly growth" since Q3 2013 and Q1 2014, respectively, in Q1 2022.

Based on Collier's Industrial Q1 2022 report, rents grew by 1.0% QoQ, whilst prices rose 3.1% QoQ; however, due to an expected surge in supply, the analyst said prices and rents may grow at a "more measured pace."

According to Colliers, 25.90 mil sf more industrial space is scheduled to be completed this year, whilst the average annual pipeline supply from present to 2025 at 12.92 mil sf is almost double the 6.46 mil sf over the past three years.

Whilst the robust pipeline may slow down the growth of rents and prices, it can provide industrialists with more options, giving them a chance to diversify their supply chains and "tap on alternative options for cheaper storage," said Lynus Pook, executive director for Industrial Services at Colliers.

Looking ahead, Colliers said, "demand for industrial assets, especially high specification warehouses and business parks, should still be underpinned by growth industries such as the food, media, logistics, technology, and biomedical sectors."

"Further, the drive for more robust supply chains, the switch to a just-in-case strategy, as well as the increasing digitalisation of industries and the economy should continue to support industrial rent and price growth," the expert added.
 

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