Industrial land rents will slide up to 3% in 2012

Firms are now more cautious in expanding and will drive down rents, says Colliers.

Capital values could also soften by the same percentage due to current uncertainties and pressures in the industrial market.

"Downside risks in the external environment such as the persistent Eurozone debt crisis, the sluggish recovery in the US and the weak growth momentum in Asia will continue on Singapore's economic growth going forward and expose companies in the manufacturing as well as the transport and storage sector to strong headwinds," noted Colliers in its Asia Pacific Industrial Market report.

But Colliers notes that its 3% capped decline prediction could have been much worse if not for the positive growth outlook of companies in the Asia region, which will keep them running a presence in Singapore.

"However, these firms are expected to maintain their presence in Singapore so as to leverage Singapore's Global-Asia positioning to tap into growth opportunities in Asia and the rest of the world," said Colliers. "In addition, Singapore's sound economic fundamentals should help the country and the industrial market ride through the current uncertainties."

"Hence, while Singapore's industrial land, capital values and rents will likely soften in the next 12 months, the fall is expected to be capped at 3%," added Colliers.