Industrial space rents slip by 1.2% to $2.08 psf in 3Q

The Pioneer-Tuas cluster suffered the largest decline.

The industrial sector continued to face strong headwinds in most industries and sectors, putting further pressure on both industrial space rentals and prices in Q3 2016.

Data from Knight Frank show that overall island-wide rents declined by 1.2% q-o-q to $2.08 per sq ft per month (psf pm) in Q3 2016, as rents across most locations dropped.

The Pioneer – Tuas cluster incurred the largest drop of 9.6% q-o-q in Q3 2016, mainly due to the under-performing oil and gas industry, related offshore and marine services, and general manufacturing that dragged down the activities of related and supporting trades agglomerated within the B2 cluster.

Rents in Kaki Bukit – Ubi – Paya Lebar – Eunos and Kallang – Geylang – Bendemeer clusters improved by 2.6% and 1.3% q-o-q respectively.

"This cluster is generally more resilient due to their status as an established industrial hub with complementing amenities such food centres. It is also supported by the reduced disamenities like improved traffic conditions for industrialists in the area in view of the near completion of stage-three Downtown Line by 2017 which covers stations such as Bendemeer, Ubi and Kaki Bukit," said Knight Frank.

Business Park rents moderated downwards by 4.1% q-o-q to $4.22 psf pm in Q3 2016 on the back of the challenging business climate with tenants exercising greater caution in rental expectations. Nonetheless, business park space equipped with flexible layout, ready-amenities, good connectivity, and clustering effect with spill-over benefits are still well occupied.