Industrial rents up 1.5% in 2Q2022, charting seventh consecutive quarter of growth
The growth in industrial value and rental indices was supported by manufacturing output expansions in electronics and also accuracy engineering, in addition to resistant demand for semiconductors, mentions Leonard Tay, head of study at Knight Frank Singapore.
Nonetheless, He notes that long-term need for industrial place will certainly still be driven by tailwinds such as Singapore’s boosting concentrate on high-value manufacturing and also biomedical industries. Colliers is forecasting commercial leas to expand between 2% to 4% this year, while industrial rates are expected to increase in between 5% to 7%.
Industrial prices also increased, growing 1.5% q-o-q in 2Q2022 yet alleviating from the 3.1% q-o-q surge documented the previous quarter. Meanwhile, commercial occupancy prices inched up from 89.8% in 1Q2022 to 90% in 2Q2022.
Looking forward, Tricia Song, CBRE head of research study, Singapore and Southeast Asia, notes that industrial pipeline stays “exceptionally slim”, with multi-factory pipeline anticipated to taper down from 2023 while most of stockroom supply up till 2023 is already fully pre-committed.
To that end, the industrial property market is anticipated to gain from the limited supply. “Preventing any sharp downturn in the worldwide economy, need for industrial space in 2022 is anticipated to be effective and also occupancy must be relatively steady,” Song adds.
Colliers’ He, on the other hand, highlights that new supply will come onstream at an average overall of around 1.2 million sqm every year from today up until 2025, consisting of 1.6 million sqm to be accomplished this year. This exceeds the 0.7 million sqm yearly average over the past 3 years, meaning that supply is likely to catch up to request and also solidify the pace of rental as well as rate progress, she says.
For manufacturing facilities, multiple-user factories saw the highest quarterly as well as annual growth in 2Q2022 at 2.1% as well as 3.7% specifically. “This could be credited to the growing interest for high-specification multi-user factories, as occupiers look for office grade commercial areas near the city edge,” marks Catherine He, head of research, Singapore at Colliers.
He adds that climbing problems associating with food stability as well as accessibility to resources and also necessities motivated significant stockpiling task, which added to more powerful demand for storehouses. “The enhancing Singapore bill offered assistance to stockpiling, mitigating rise in rates as inflation becomes increasingly considerable,” he mentions.
Storage facilities charted the strongest efficiency amongst all the industrial sub-segments, signing up a rental boost of 2.1% q-o-q as well as 5.7% y-o-y specifically in 2Q2022. During the quarter, storage facility occupancies enhanced to 90.9%, up from 90.3% in 1Q2022.
Industrial leas increased 1.5% q-o-q in 2Q2022, up from the 1% q-o-q growth documented the previous quarter, according to information launched by JTC on July 28. This notes the 7th consecutive quarter of growth and also the fastest quarterly growth since 3Q2013. On a y-o-y basis, rents grew 3.4% throughout the 2nd quarter.