Increases in the price and rental of industrial space have “slowed sharply”, according to data from JTC on Thursday (Apr 23).
The slowdown follows the increase in supply of industrial land and space in recent years, and in tandem with moderation in occupancy rates, it said in a news release.
The rental rate movement in for all industrial properties fell 2 per cent year-on-year in the first quarter of 2015. Similarly, the occupancy rate movement for all industrial properties fell 0.9 per cent year-on-year during the same period.
However, the price movement for industrial properties was up 0.5 per cent year-on-year in the first quarter.
As at end-February 2015, about 1,700 units in uncompleted multiple-user developments, totalling more than 500,000 square metres (sqm), were still available for sale. More than 50 of the unsold units are larger than 1,000 sqm in size, said JTC.
Going forward, about 2.1 million sqm of industrial space, which includes 420,000 sqm of multiple-user factory space, is expected to be released in the next three quarters. In addition, 2.5 million sqm of industrial space is estimated to be available in 2016.
“This is significantly higher than the average annual supply and demand of around 1.5 million sqm and 1 million sqm in the past 3 years, and is likely to exert further downward pressures on occupancy rates,” JTC said.