Median rent declined marginally by 3.1% quarter-on-quarter to $1.73 per sq ft per month (psf pm) in the fourth quarter of 2020. On an annual basis, multiple-user factory rent slipped 0.9%.
Singapore saw the median rent of multiple-user factory spaces decline marginally by 3.1% quarter-on-quarter to $1.73 per sq ft per month (psf pm) in the fourth quarter of 2020, revealed a Knight Frank report.
On an annual basis, multiple-user factory rent slipped 0.9%.
Knight Frank noted that the 1,562 leasing transactions for such industrial space in October and November represented a 16.8% increase from the 1,337 transactions posted over the same period in 2019.
In Q4 2020, prices of multiple-user factory space also remained fairly steady, averaging around $357 psf, down 3.8% from the previous year.
Units with longer remaining leases of 61 to 99 years recorded the largest growth in prices at 19% year-on-year to $379 psf on average in Q4 2020.
“Demand for these spaces were fuelled by the comparatively lower availability of multiple-user factory units with longer tenures,” said the report.
Looking ahead, Knight Frank expects some 53.8 million sq ft gross floor area (GFA) of industrial space to be completed between Q4 2020 and 2024.
Of these, about 43.2% is expected to be completed this year, with a significant proportion being single-user and multiple-user factory spaces.
“Coupled with the phased withdrawal of government fiscal support for businesses, multiple-user factory prices and rents are likely to come under pressure, falling by not more than 5% in 2021 while single-user factories could fare slightly better,” it said.
“However, with the anticipated distribution of viable COVID-19 vaccines, the city-state’s strategic location and developed IT infrastructure would position Singapore as a key warehousing and storage hub, and logistics properties are expected to benefit with price and rent increases ranging from 1% to 3% in 2021.”
This is especially true for cold-storage facilities catering to the requirements of storing the temperature-controlled vaccine.