Industrial landlords suffer as large manufacturers exit

On top of a looming space glut.

Industrial landlords are struggling with the double whammy of vanishing tenants and a massive space glut.

A massive space glut isn’t the only trouble plaguing Singapore’s industrial leasing segment. Industrial landlords are also grappling with the consequences brought about by vanishing tenants, as evidenced by two large manufacturers which decided to close local operations in the second quarter.

According to Savills, manufacturers are choosing to exit on back of Singapore’s rising business costs.

For instance, Japanese petrochemicals giant Teijin announced that it would shut down its Singapore operations at the end of this year.

KTL Global, a rigging equipment company, will be relocating its manufacturing operations to Johor Bahru while keeping its headquarters here. 

“The situation bears out the industry’s challenges that could quite easily oust smaller manufacturers who are less resilient to the onslaught of issues buffeting the industry,” Savills said. 

“The upcoming oversupply of factory and warehouse space for the rest of the year and into the next will place further downward pressure on industrial rents, while sales are expected to remain thin,” the report noted.