Industrial leasing market recovers from 3 straight quarters of slump

It remains in the red on a yearly basis, however.

From the months of April-June, activity in the industrial leasing market picked up after three consecutive quarters of decline.

Compared to the 8.0% QoQ decrease in Q1/2016, rental volumes surged 29.2% QoQ to 2,285 in Q2/2016, data from Savills show.

The research firm explains that This could be due to the preference to lease rather than to buy in an uncertain economy.

Nevertheless, it was still 1.4% YoY lower than the lease volume of 2,317 in Q2/2015.

"In the face of a slow and uncertain economy, companies occupying industrial premises remained cautious, said Savills.

The average monthly rent of Savills basket for the factory and warehouse sector held firm at S$1.70 per sq ft in Q2/2016 while the high-tech property sector displayed its resilience in the reviewed quarter. 

Based on a basket of tracked high-tech spaces, Savills research shows that the average monthly rent of high-tech spaces rose 1.1% QoQ to S$2.76 per sq ft in Q2/2016, reversing the 0.42% QoQ drop recorded in the preceding quarter.

"The reason for this is that high-spec industrial space is still sought after because for high-valueadd industrialists, they offer offi ce-like facilities and amenities at signifi cantly lower rents," it explained

However, on a YoY basis, rents slipped 4.8% from S$2.90 per sq ft per month in Q2/2015.