Industrial space prices up 0.1% in Q3: JTC

Prices of multi-user factory spaces remained unchanged whilst single-user factories edged up 0.3%.

The price index of industrial spaces reversed from the 0.1% dip in Q2 as it inched up 0.1% QoQ in Q3, whilst rentals remained unchanged during the same period, according to data from JTC.

Prices of multi-user factory spaces remained unchanged, whilst those of single-user factories edged up 0.3% QoQ. Warehouse rentals fell 0.2%, whilst those of single-user factories and business parks were up 0.5% and 0.1% QoQ. Multi-user factory rentals were also flat.

The overall occupancy rate remained flat at 89.3%. For multi-user factory spaces, occupancy rate slipped 0.1% QoQ to 87.1%, whilst those of single user factories went up to 91.1% from 90.9%. The rates of business parks and warehouses were at 86.2% and 88.1%, respectively.

“Although the Q3 data showed some signs of stabilisation, we are cautious about the outlook of the industrial market, particularly the warehouse and factory segments. We maintain our forecast that overall rents and occupancy should remain weak in the next few quarters,” said Tricia Song, head of research for Singapore at Colliers International.

Song also noted that both rents and occupancy decline in warehouse spaces have continued due to dampened logistics demand.

Warehouse space saw both rents and occupancy decline in Q3 as the deterioration in global trade continued to dampen logistics demand. Warehouse rents dropped by another 0.2% QOQ and occupancy dropped by 0.6 pp QOQ as supply almost quadrupled demand to 1.2 million sqft (net).

As of now, there are about 12,000 sqm of uncompleted industrial space up for sale as of end Q3. JTC added that about 340,000 sqm of industrial space will be added to the supply pipeline in 2019, and a further 1.9 million sqm in 2020.