Supply constraints to impede pending industrial projects

This comes despite JTC’s projection on increased demand for ndustrial spaces in 2021.

With only 131,000 square metre (sqm) of industrial spaces in Singapore completed, despite initial expectations of one million sqm, analysts project that the delays could persist longer for some projects due to manpower and raw material supply constraints.

The projection comes as the latest data released by JTC found that prices and rents of industrial spaces in Singapore have continued to rebound, recording a 0.9% QoQ increase on industrial property prices and a 0.6% QoQ increase on rents.

Occupancy rate for the overall industrial property market also inched up marginally by 0.1 percentage points QoQ.

However, JTC noted that the demand for industrial space is projected to increase as the economy starts to recover in 2021.

"Any potential rise in occupancy is likely to be tempered by new completions and the increase in supply into the market," JTC said.

JTC also said that prices and rents are likely to stabilise this year.

CBRE Research echoes this sentiment, stating that the overall outlook for the industrial sector appears sanguine in line with the expected economic recovery. It notes that both factory and warehouse rents are poised to remain resilient and exhibit some growth.

“While the saturated factory pipeline may place some pressure on rents with several large-scale multiple-user factory projects expected to be completed this year, the positive outlook for Singapore’s manufacturing sector could lend support to rents,” it added.

Meanwhile, Colliers International believes that the overall Singapore industrial market will stabilise and recover in 2021, with some segments performing better.

“The industrial property market continues to lead in the real estate recovery among other segments with the economic rebound in the manufacturing sector,” Colliers head of research for Singapore Tricia Song said.