This is why industrial rent hike will just hit 1.5%

It's for 2012's last three months.

According to Colliers International’s research, the average capital values of ground and upper floor prime freehold factory space hit $699 per sq ft and $636 per sq ft, respectively.

Here's more from Colliers International:

This came on the heels of a 5.1% and 6.0% increase correspondingly in 3Q 2012, compared to the 5.1% and 7.1% quarterly gains in 2Q 2012.

For prime freehold conventional warehouses, ground floor space was commanding an average value of $632 per sq ft as of end-September.

This was after rising by 3.9% QoQ, which is a slower rate of growth compared to last quarter’s 4.3% QoQ rise. Likewise, the average capital value for upper floor space reached $557 per sq ft, after increasing by 4.5% QoQ in 3Q 2012, which is slower than the 5.3% QoQ growth registered in 2Q 2012.

While industrial property prices are expected to remain on the uptrend in the finalquarter  of 2012, a further deceleration in price growth is anticipated.

This is in view that buyers are likely to be more cautious and price sensitive given the uncertain economic situation.
Hence, although sellers are expected to continue to seek high prices, average capital values of industrial space are forecast to grow at a slower pace of up to 4% in 4Q 2012.

Likewise, industrial rents are expected to register slower growth of up to 1.5% in the last three months of 2012. This will be supported mainly by lease renewals, and to a lesser extent from companies relocating or expanding their premises.