Industrial rents and prices rise for the 11th consecutive quarter in 2Q2023
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According to a report on the market published by Colliers that the local industrial rental and price indexes have reached an 11th quarter in a row of improvement the 2Q2023. The index for rental increased 2.1% q-o-q, slowing from the 2.8% q-o-q growth recorded in the 1Q2023. In the same way, the price index rose 1.5% q-o-q in 2Q2023 and was in line with the results of the prior quarter.
The industrial sector fought off the trade indicators that were softening, such as the continuous declines in manufacturing output, non-oil exports (NODX) and the buying managers’ index (PMI).
However the pipeline of expected industrial supplies is still robust because previously delayed construction completions begin to come into the scene in the second half of 2023. According to Colliers that this had already been affecting the market in 1H2023 as new supply outpaced demand and led to lower occupancy levels.
The remainder of the year will see an additional 6.7 million square feet of industrial space being added to the market. In the coming two years, up to 2025 the market will witness the average amount of 10.5 million sq ft brought into the marketplace. This will have the result of reducing rents and limiting price increases, according to Lynus Pook, the head of industrial services Singapore at Colliers.
“Despite an extended period of uncertainty in the macroeconomic climate the industry assets are in high demand from companies in the biomedical, logistics and semiconductor sectors is robust. This trend is likely to continue given Singapore’s appealing location and its status as a regional hub” the expert says.
Industrial assets that are more specific like high-spec warehouses and multi-user factories will continue to be a major driver for industries. The demand will be bolstered by businesses involved in logistics, advanced manufacturing biomedical, food and production, according to Pook.