Rents for warehouses increased 0.2% quarter-on-quarter (q-o-q), while rents for single-user factories and multiple-user factories rose 0.1% and 1% respectively.
Singapore saw industrial property prices and rents continue to rebound, increasing 1.8% and 0.6%, respectively in Q2 2021.
Rental growth was observed across all warehouse and factory submarkets. Rents for warehouses increased 0.2% quarter-on-quarter (q-o-q), while rents for single-user factories and multiple-user factories rose 0.1% and 1% q-o-q, respectively.
Tricia Song, CBRE’s Head of Research for Southeast Asia, said the pace of increase for high-specs factory and prime logistics projects was faster amidst tighter occupancy.
Overall industrial occupancy improved by 0.1 percentage points q-o-q to 90.1% during the period under review. Analysts attributed the growth to the multiple-user factory submarket, which posted a 0.7 percentage point hike to 89.7% due to rising demand.
Occupancy for warehouse slightly dropped by 0.1 percentage points amid project completions that came on stream in Q2 2021. These include the “partial completion of JTC Logistics Hub @ Gul, AEI of Logos Tuas Logistics Hub and remaining completion of Cogent Jurong Island Logistics Hub”, said Song.
Recommended article: Top 3 Ways COVID-19 Is Still Affecting Singaporeans’ Property Decisions
For the second half of this year, about 18.8 million sq ft of industrial space is expected to be completed. Of this, single-user factory space is expected to account for 46%, while multiple-user factory space will make up 31%.
“While the impending supply will keep factory price and rental growth in check for the rest of 2021, there are reasons for optimism,” said Leonard Tay, Head of Research at Knight Frank.
He noted that Singapore continues to attract manufacturing investment, including international biotechnology companies.
“BioNTech, the German biotechnology company responsible for the Pfizer vaccine, intends to open its Southeast Asian headquarters in Singapore this year, with further plans for the development of a mRNA-based vaccine production facility set to be operational from 2023, while Sanofi Pasteur plans to expand its footprint in Singapore with the development of a $638 million vaccine production centre with full operations beginning in 2026,” he said.
“Even though the resurgence in COVID-19 cases at home and abroad has put a dampener on the recovery in the transport engineering cluster, recent business sentiments in the manufacturing sector were positive according to the Economic Development Board (EDB).”
Looking ahead, Tay expects factory rents and prices to moderately increase between 1% and 3% for the entire 2021.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: firstname.lastname@example.org