Industrial rental growth decelerates to 2.1% QoQ in 2Q23

Higher supply will continue to moderate rental growth, said Colliers.

The industrial market’s rental index rose anew in 2Q23, albeit at a slower pace.

Data from Colliers showed that rents grew 2.1% QoQ in 2Q23, decelerating from the 2.8% QoQ growth in the previous quarter.

Amongst types of industrial properties, warehouses recorded the highest rental growth (5.7% YoY), followed by higher specification industrial assets (3.7% YoY), and factories (2.4% YoY).

Colliers said “higher supply” will continue to moderate rental and price growth in the market.

This year, there’s a remaining supply of 6.7 million square feet (sf). Until 2025, there will be an average supply of industrial space of 10.5 million sf.

“Supply is expected to stay ahead of demand, which could also provide more options for occupiers,” Colliers said.