Industrial rents up 1.5% in 2Q2022, charting seventh consecutive quarter of growth

To that end, the industrial real estate market is expected to benefit from the tight supply. “Barring any sharp stagnation in the worldwide economic climate, need for commercial area in 2022 is anticipated to be robust as well as tenancy ought to be reasonably steady,” Song adds.

Industrial rental fees grew 1.5% q-o-q in 2Q2022, up from the 1% q-o-q development recorded the previous quarter, according to information released by JTC on July 28. This marks the 7th consecutive quarter of development as well as the fastest quarterly growth considering that 3Q2013. On a y-o-y basis, rental fees expanded 3.4% throughout the 2nd quarter.

He includes that climbing issues associating with food safety and security and access to basic materials as well as needs prompted significant stockpiling task, which added to stronger demand for warehouses. “The reinforcing Singapore dollar offered assistance to stockpiling, minimizing escalation in costs as inflation becomes increasingly substantial,” he mentions.

Colliers’ He, on the other hand, highlights that new supply will come onstream at an average total amount of about 1.2 million sqm every year from currently up until 2025, consisting of 1.6 million sqm to be completed this year. This surpasses the 0.7 million sqm annual standard over the past 3 years, implying that supply is most likely to catch up to require as well as toughen up the rate of rental and rate growth, she believes.

Industrial rents expanded 1.5% q-o-q in 2Q2022, up from the 1% q-o-q growth tape-recorded the previous quarter, according to data launched by JTC on July 28. This marks the 7th successive quarter of growth and the fastest quarterly development since 3Q2013. On a y-o-y basis, rents expanded 3.4% during the 2nd quarter.

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The growth in industrial price and rental indices was supported by making result expansions in electronic devices as well as accuracy engineering, in addition to resilient need for semiconductors, notes Leonard Tay, head of study at Knight Frank Singapore.

He notes that long-lasting demand for industrial area will still be driven by tailwinds such as Singapore’s increasing focus on high-value production and also biomedical markets. Colliers is projecting commercial rental fees to expand in between 2% to 4% this year, while commercial prices are expected to grow between 5% to 7%.

Looking in advance, Tricia Song, CBRE head of research study, Singapore as well as Southeast Asia, keeps in mind that commercial pipe remains “exceptionally thin”, with multi-factory pipeline anticipated to taper down from 2023 while most of storage facility supply up till 2023 is already fully pre-committed.

Industrial costs also rose, growing 1.5% q-o-q in 2Q2022 however reducing from the 3.1% q-o-q surge videotaped the previous quarter. Commercial tenancy prices inched up from 89.8% in 1Q2022 to 90% in 2Q2022.

Warehouses charted the best performance amongst all the industrial sub-segments, signing up a rental rise of 2.1% q-o-q as well as 5.7% y-o-y respectively in 2Q2022. During the quarter, storage facility tenancies raised to 90.9%, up from 90.3% in 1Q2022.

For factories, multiple-user factories saw the greatest quarterly and annual development in 2Q2022 at 2.1% as well as 3.7% respectively. “This could be attributed to the expanding need for high-specification multi-user factories, as occupiers look for workplace grade commercial spaces near the city edge,” keeps in mind Catherine He, head of study, Singapore at Colliers.