Average industrial property occupancy rates crashed to 7-year low in Q3

Rents slipped 1.8% last quarter.

Singapore’s industrial property occupancy rate crashed to a 7-year low in the third quarter, causing both rents and prices to fall islandwide.

JTC’s latest All Industrial Property Price Index (PPI) reflected a 0.9% QoQ decline in 3Q after rising 4.5% in 1H 2014.

Latest official statistics also showed that the All Industrial Property Rental Index (PRI) fell by 1.8% QoQ in 3Q 2014, after holding relatively steady for the preceding three quarters.

According to Colliers, this slip occurred despite a slight 0.2-percentage point increase in the islandwide industrial average occupancy rate to 90.9% as of 3Q 2014, as tenants remained cost sensitive. Consequently, the All Industrial PRI saw an overall decline of 1.5% in the first nine months of 2014.

“Like prices, 3Q 2014’s decline in the All Industrial RPI was due to the 2.2% QoQ slide in rents of multiple-user factory space. This came on the back of supply pressures as indicated by the fall in the average occupancy rate to a 7-year low of 86.8% as of 3Q 2014. Over the same quarter, rents for multiple-user warehouse space remained stable. Additionally, the average occupancy rate for multiple-user factory space lost another 0.5-percentage points during the quarter, from 87.3% in 2Q 2014 to 86.8% in 3Q 2014. This is the lowest occupancy level since 3Q 2007 which saw 86.4%,” noted the report.