Industrial real estate investments recorded a volume of $606.8m

Positive developments were seen in Q1 despite the sombre tone.

Industrial real estate investments recorded the second highest transaction volume of $606.8m, with a decline of 22% QoQ in Q1, according to a Cushman & Wakefield report. The main bulk of the volume came from Ascendas REIT’s Gulab sale and purchase of a 25% stake in Galaxis, and the Biopolis 6 price and concept tender.

Meanwhile, industrial rents for most segments are projected to moderate in 2020 as the sector faces unprecedented challenges and disrupted supply chains due to lockdowns.

Despite the spread of the COVID-19 pandemic, there were also positive developments seen in the first quarter. Deutsche Messe also signed a memorandum to host Industrial Transformation Asia-Pacific in Singapore for the next five years and will set up its regional headquarters in the country. In addition, ExxonMobil committed a multi-billion dollar investment at its integrated refining and petrochemical complex in Singapore, creating 135 jobs and producing 48,000 barrels of lubricant and fuel per day.

“Investment sales for quality assets like business park[s] and logistic buildings will still be of interest to many investors. Many have put on hold their acquisition plans but we anticipate activity to return once the COVID-19 situation eases,” said Brenda Ong, executive director and head of logistics and industrial of Cushman & Wakefield.

Location will play a big factor in determining rental growth of different micro markets during this period as those in outlying locations are expected to be more affected by the COVID-19 situation.
Nevertheless, the market should see more initiatives for deep tech startups, such as pharmbio, medtech, advanced manufacturing, and agri-food tech. Industrial and logistics play a role to support the growth of these sectors.