Chart of the Day: Industrial tenancies up 5% in Q3

Tenancies rose at a slower clip as firms held back in their expansion plans.

This chart from Knight Frank shows that the number of tenancies in the industrial market rose 5% YoY in Q3 compared to Q3 2018, although this rose at a slower pace compared to 18.6% in Q3 2018.

The moderation in the increase of tenancies was because firms were more cautious in expanding their physical footprint, said Knight Frank.

“Given the uncertain external environment, manufacturing companies will face greater challenges in forecasting their space needs in the next three years. They should review their real estate strategy to remain nimble.” said Tan Boon Leong, head of industrial at Knight Frank.

Warehouse space saw both rents and occupancy decline in Q3 as the deterioration in global trade continued to dampen logistics demand, according to a separate report by Colliers. Warehouse rents dropped by another 0.2% QOQ and occupancy dropped by 0.6 pp QOQ as supply almost quadrupled demand to 1.2 million sqft (net).