Here's why landlords’ rental expectations are increasing

Analysts said strong leasing activity in Q3 played a factor.

Rental expectations increased as leasing activity remained stable in Q3 2021.

A CBRE report showed that leasing activity for Q3 consisted of new set-ups and expansions in third-party logistics, food storage and electronics sectors.

Prime logistics' rental remained extremely tight for the quarter at 1.4% q-o-q increase, but was exceeded by warehouse rents which recorded a 1.9% growth.

Factory rents likewise recorded growth for Q3, recording a 0.7% q-o-q increase. 

“Demand for storage space has begun to spill over to the second-tier warehouse segment,” CBRE said. 

The semiconductor market was driven by expansion activity as manufacturers sought to increase production.

Another notable movement in the market for the quarter was the uptick in leasing demand from manufacturers of essential commodities like masks and gloves “as the pharmaceutical trade in COVID-19 related sectors remained active.” 

Analysts are advising occupiers to plan their space requirements early as “growth prospects for the manufacturing and wholesale trade sectors are expected to remain strong.”