Industrial landlords troubled over low occupancy rates

The downtrend will continue this year.

Low occupancy rates will continue to remain a drag on industrial property landlords, with little respite in the horizon this year.

According to BNP Paribas, the industrial sector will remain subdued this year due to a combination of leasing policy restrictions, rising supply and tighter employment laws.

These factors could lead to slower tenant demand for industrial space and add to the pressure on rents and capital values.

"The ongoing trend of property assets being converted from single-user to multi-tenants could also put pressure on occupancy rates. Over time, however, as new supply gets increasingly pre-committed, we believe there is limited speculative supply and, as such, occupancy should pick up gradually," stated BNP Paribas.