Industrial property market suffers from slower sales, leasing activities in Q3

Rents for high-specs industrial space also eased.

International property consultant, Colliers International’s latest quarterly research report on the Singapore industrial property sector revealed that activities in both the sales and leasing markets have slowed down in 3Q 2013.

Here's more from Colliers:

Sales market

After registering an increase in the past 16 quarters, the average capital values of prime freehold conventional factory space reflected a slight dip in 3Q 2013. 

The average capital values of ground- and upper-floor prime freehold conventional factory space eased by 0.3 per cent and 0.2 per cent quarter on quarter (QoQ), to S$716 per sq ft and S$657 per sq ft, respectively in 3Q 2013.

In contrast, the average capital values of prime freehold warehouse space continued to inch up but at a moderated rate.

The average capital values of ground- and upper-floor prime conventional warehouse space in 3Q 2013 reached S$659 per sq ft and S$584 per sq ft, respectively – both increasing by 0.5 per cent QoQ. This is compared to the QoQ growth of 1.1 per cent for ground-floor premises and 0.9 per cent for upper floors in 2Q 2013.

Leasing market

Over at the leasing market, the high-specifications (high-specs) industrial space segment experienced an easing in rents during the quarter.

The average monthly gross rents of ground- and upper-floor high specs premises slipped by 0.3 per cent and 1 per cent QoQ to S$3.29 per sq ft and S$2.95 per sq ft, respectively, in 3Q 2013.

Mr Tan comments, “The stricter enforcement on the legitimate use of industrial space by the Government, as well as the weaker market sentiment in view of softer economic indicators, have resulted in a sluggish take-up rate of high-specs space during the quarter; which in turn, affected rents.”

Nonetheless, the average monthly gross rents for prime conventional industrial space registered a slight increase in 3Q 2013, after holding constant in the preceding quarter – supported by lease renewals and higher rents sought by landlords who have paid high prices for their properties in recent years.