The prices and rentals of industrial space in Singapore have continued to soften, following an increase in supply of industrial land and space by the Government, according to JTC in its quarterly market report released on Thursday (Jul 23).
Overall, the prices of industrial properties fell 0.9 per cent year-on-year in the second quarter of 2015. The prices of multiple-user factory space saw a 2.3 per cent decrease in the same period, while single-user factory space prices remained flat. On a quarter-on-quarter basis, overall prices fell 0.7 per cent.
Meanwhile, overall rentals for industrial properties fell 2.7 per cent year-on-year in the second quarter, with rentals for multiple-user factory space seeing the biggest decrease of 3.1 per cent. However, rentals for single-user factory space bucked the trend, increasing 1.2 per cent year-on-year. On a quarter-on-quarter basis, overall rentals fell 0.7 per cent.
The occupancy rate for industrial space increased in the second quarter. Overall occupancy rates went up 0.3 percentage point year-on-year to 91 per cent. Warehouse occupancy rates saw the biggest increase of 3.1 percentage points year-on-year to 91.6 per cent. This was due to occupants moving into new warehouse developments completed in earlier periods, said JTC. However, despite the increase, the occupancy rate of the overall industrial space market still fell short of the peak of 93.5 per cent in 2012.
With the softening of prices and rentals, transaction volume also decreased by around 20 per cent year-on-year in the second quarter, said JTC.
For the second half of the year, about 1.6 million sqm of industrial space, including 290,000 sqm of multiple-user factory space, will be added, said JTC. An additional 2.8 million sqm of industrial space is expected to be added in 2016, higher than the average annual supply and demand of about 1.5 million sqm and 1.1 million sqm in the past three years. This is likely to exert further downward pressures on occupancy rates, said JTC.
“The Government will continue to monitor the industrial property market closely to ensure that the diverse needs of industrialists are met,” said JTC. “Appropriate measures will also be introduced where necessary to promote a stable and sustainable industrial property market.”