Rising rents: Industrial property rentals shoot up in Q3 2011

The average monthly gross rents of prime flatted factories and warehouses grew between 15-17% in the first three quarters of 2011.

Colliers International noted that the continuing activities in the leasing market amid an occupancy rate of above 92 per cent for conventional flatted factories and warehouses – a level historically known to be supportive of rental growth – provided the impetus for their average prime monthly gross rents to rise by 4 per cent to 4.7 per cent quarter-on-quarter (QoQ) during the period from July to September 2011. This is a healthy moderation from the 6.4 per cent to 7.7 per cent QoQ growth recorded in the preceding three months.

Hence, as of the end of September 2011, prime flatted factory space was commanding average monthly gross rents of S$2.34 per sq ft for ground floor space and S$2.04 per sq ft for upper floor space, while the corresponding rates for warehouses were S$2.45 per sq ft and S$1.99 per sq ft, respectively.

Consequently, the average monthly gross rents of prime flatted factories and warehouses have already chalked up growths of between 15.3 per cent and 17.8 per cent in the first three quarters of 2011, far exceeding 2010’s full year increase of 8.1 per cent to 11.9 per cent.