New industrial space in SG projected at 21.1msf for 2022

The expansion will support rent and price increases of between 3% to 5%.

In the upcoming year, Knight Frank Singapore projected some 21.1 million square feet (sqft) of new space to come on stream across 2022, comprising 42.6% of the total stock set to be completed from the fourth quarter (Q4) of 2021 to 2025.

Knight Frank, in its industrial real estate sector report for Q4 2021, also forecasted investment activity driven by end-users looking for manufacturing facilities for their own use, as well as Grade A warehouses that boast high-quality specifications which facilitate growing supply chain demand.

The healthy demand and expanding activity in the sector will support rent and price increases of between 3% and 5% for the whole of 2022.

According to the report, the island-wide median rent of multiple-user factory space increased by 1.6% quarter-on-quarter to $1.79 per sqft, posting a continued uptick in rental growth from the third quarter. However, rental activity declined slightly as the months of October and November registered 1,628 tenancies, 10% lower than the 1,809 rental transactions recorded in July and August 2021. Year-on-year, this was nonetheless 4.2% higher than the 1,562 tenancies signed in the same period last year.

In light of the expanding small and medium-sized enterprises in Singapore, many have been on the lookout for affordable industrial spaces to locate their facilities. As such, this steady demand contributed to an increasing proportion of transactions valued at less than $10m. In Q4, out of the total 312 multiple-user factory caveats lodged at an average price of $459 per sqft as of 31 December 2021, about 99.4% of them were of smaller-sized deals that are characteristically more palatable for this group.