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Prices, occupancy of industrial space decline in Q2

The Government will continue to monitor the overall industrial property market and, where necessary, release more land with a range of sizes to suit different industry needs, JTC says.

SINGAPORE: Prices and rentals of industrial space continued to moderate in the second quarter, as industrial occupancy rates continued to fall, according to a quarterly report by JTC.

Released on Thursday (July 24), the report said industrial occupancy rates in the second quarter fell by 0.9 percentage point from the previous quarter to 90.7 per cent – the lowest level since late 2007. For multiple-user factory space, the occupancy rate fell by 1.1 percentage points to 87.3 per cent.

On a year-on-year basis, the occupancy rate of the overall industrial property market fell by 1.7 percentage points, from 92.4 per cent to 90.7 per cent. For multiple-user factory space, the occupancy rate fell by 3.1 percentage points, from 90.4 per cent a year ago to 87.3 per cent in the second quarter.

PRICES, RENTALS STABILISE

Rentals of industrial space in the second quarter fell 0.1 per cent from the previous quarter, while rentals of multiple-user factory space remain unchanged. On a year-on-year basis, rentals of industrial space rose by 5 per cent in the quarter, significantly slower than the average increase of 10.2 per cent per year over the past four years. For multiple-user factory space, rentals rose 4.3 per cent on a year-on-year basis, also significantly slower than the average increase of 9.8 per cent per year over the past four years.

Prices also continued to stabilise in the second quarter, rising marginally by 0.7 per cent on a quarter-on-quarter basis. For multiple-user factory space, prices rose by 2.5 per cent from the last quarter, mainly due to a higher proportion of freehold properties transacted. On a year-on-year basis, prices for industrial space rose by 3.9 per cent, significantly slower than the average increase of 18.8 per cent per year over the past four years. Similarly, the 6.2 per cent year-on-year increase in prices of multiple-user factory space was also significantly slower than the average increase of 19.1 per cent per year over the past four years.

UPCOMING SUPPLY

According to JTC, the Government will continue to monitor the overall industrial property market and where necessary, release more land with a range of sizes to suit different industry needs.

JTC also said it will continue to develop more specialised industrial land with features such as shared facilities and services to support the growth of key industry clusters and catalyse new ones. About 1.8 million sqm of industrial space is expected to come on-stream in the second half of this year, out of which 400,000 sqm are multiple-user factory space. Between 2015 and 2017, an average of about 1.6 million sqm of industrial space is expected to come on-stream every year.

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