Despite falling prices, occupancy and rental rates for industrial spaces, an estimated 3.8 million sq m of industrial spaces will be available from now until end-2016, JTC Corporation said Thursday (22 October).
In its latest quarterly market report for industrial properties, JTC said about 798,000 sq m of industrial space – including 100,000 sq m of multi-user factory space – will be available in the next quarter.
“This is significantly higher than the average annual supply and demand of around 1.6 million sqm and 1.2 million sqm in the past three years, and is likely to exert further downward pressure on occupancy rates,” JTC said.
Meanwhile, rents of industrial properties fell for a second straight quarter, falling 0.8 quarter-on-quarter and declining 1.6 percent from that a year ago. Rents of multiple-user factory space also fell by 1.1 percent in Q3, and down 1.9 percent from the same period last year.
Commenting, JTC said: “the decrease in the rental indices contrasts with the average annual increases of around 3 percent in the past four years.”
Industrial property prices also fell in Q3, registering a 0.3 percent decline both from the previous quarter and a year ago. Prices of multiple-user factory space also fell for the second consecutive quarter, down 0.4 percent from the second quarter and 0.8 percent from a year ago.
According to JTC, his contrasts with the average annual increase of 8 to 9 percent in the past four years.
Prices and rents have been moderating in recent years given the rise in supply of industrial land and space. JTC said: “With a large supply coming on-stream over the next few years, there will be a wide range of options for industrialists planning to expand their operations,”
Currently, around 2,300 units totaling about 657,000 sq m located in uncompleted strata-titled developments are currently available for sale according to JTC, and the majority of these units located in the North region of Singapore.