Industrial property prices and rentals in Singapore started to rise quarter over quarter from January to March 2021, continuing a pattern that began in the fourth quarter of 2020, but the figures are still down year over year.
Industrial property prices increased by 0.9 percent quarter over quarter, according to JTC data published on Thursday (April 22). Rents increased by 0.6 percent. This occurred when increasing demand clashed with low supply caused by the pandemic’s disruption of building activities. More industrial property set to launch to ride this wave, such as Polaris @ Woodlands which is going to be a B2 Industrial development.
Although one million square meters of industrial space was scheduled to be constructed in the first quarter of 2021, only around 131,000 square meters were completed in the first three months.
Prices and rentals are both down 1.3 percent and 0.9 percent, respectively, as compared to the same time last year.
The occupancy rates in most segments fell quarter over quarter. Business parks had the biggest drop, down 0.7 percent, led by single-use manufacturing and warehouses, all down 0.1 percent. Multiple-user factories, on the other hand, increased by 0.5 percent in the last three months. Overall occupancy rates improved by 0.1 percentage point to 90 percent, up from 89.9% in the previous period.
But for business parks, which dropped 0.9 percent year over year, almost all segments saw year-over-year improvement. Overall occupancy rates rose 0.8% point year over year, extending the upward trajectory from the previous period.
JTC dedicated 87,000 sq m of ready-built facilities (RBF) property to industrialists in the first quarter of 2021, including 61,000 sq m of high-rise space and 18,700 sq m of land-based warehouse space.
RBF returns totaled 53,700 sq m for the year, including 27,700 sq m of high-rise property and 19,300 sq m of land-based warehouse space. Natural expiry or businesses consolidating activities accounted for around 57 percent of overall returns, according to the manufacturing land and utilities department.
Demand for industrial property is expected to rise in 2021, according to JTC, as the economy continues to improve.
“Any possible uptick in occupancy is likely to be offset by new completions and increased supply into the sector,” according to JTC, who also predicted that rents and rents will stay constant.
There was a total of 50.1 million sq m of manufacturing space as of the end of March this year. JTC expects to complete 2.4 million square meters of additional warehouse land before the end of the year, with another 1.6 million square meters in 2022.
This consists of 1.4 million sqm of multi-user industrial space, 1.6 million sqm of single-user factory space, 800,000 sqm of storage space, and 200,000 square meters of business park space.