, Singapore

Singapore SMEs scared of shifting operations overseas

What could be their next step, then?

According to Savills, the manufacturing sector is expected to slow in the second half of the year and this could moderate any upside for the industrial property market. 

Prices of all industrial properties may see smaller increases as sellers lower their expectations. Sales activity could also abate as the SSD dampens speculative demand.

Here's more from Savills:

Rents may see a decline on the back of the oversupply situation. However, well-located and -designed industrial buildings that meet manufacturers’ specifications could continue to command premium rents.

On a separate note, we observe that existing small and medium enterprises (SMEs) are generally apprehensive about moving their operations overseas due to the uncertainties about the regulatory framework in a new country.

Owing to their reluctance to move, these SMEs are likely to renew their leases at rents closer to landlords’ expectations. 

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