Government's efforts to promote Jurong Lake District spurs demand for rented business park space

Demand up 18.4% in Q2.

Following the easing of demand in the two preceding quarters, demand for business park space in the rental market surged 18.4% QoQ from 38 leases in the first quarter, data from Savills show.

According to Savills, the International Business Park, which had the most number of deals in Q2/2016, probably benefi tted from the efforts by the government to promote Jurong Lake District (JLD) as the second Central Business District (CBD). However, it noted that the other business parks underperformed as the market conditions turned unfavourable.
Consequently, the island-wide vacancy of business park space fell by 0.7 ppts to 19.0% in the reviewed quarter.

As compared to other business parks, One-North had the steepest
QoQ drop in vacancy level at 9.4% in Q2/2016. As such, One-North had the lowest vacancy level at 6.9% in the quarter.

Meanwhile, Savills said that even though business park vacancy levels have been on the rise for the past few consecutive quarters, landlords are still holding rents quite fi rm.

Following the flat growth in the preceding quarter, the average monthly rent of Savills basket for business parks fell by a marginal 0.7% QoQ to S$4.08 per sq ft in Q2/2016.

To ensure adequate supply of business park spaces to support the growth of key industry clusters within the area, Jurong Town Corporation (JTC) has allocated around 202,361.3 sq ft of ready-built facilities space for business park uses, in which the majority of the allocated space was at Fusionopolis for research and development activities.