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Prices, rents of industrial space likely to stay stable

(2011-12-06 03:36:50) 下一个

Business Times: Tue, Dec 06

(SINGAPORE) Capital values and rents of single-user industrial space should remain stable in the year ahead - balanced by cautious user demand and limited availability - said Colliers International in a new report.

The property firm also said that it is 'unlikely' that the JTC Corporation, Singapore's largest industrial landlord, will raise land prices further in the months ahead given the murky outlook for the global economy and the pressing need to keep Singapore's prices competitive.

Colliers released its forecasts in the bi-annual Asia Pacific Industrial Market Overview, which covers 13 cities.

The report tracks three types of industrial properties - single-user factory premises, single-user warehouse premises and multi-user high-specifications industrial premises.

Rents for factories in the central area rose 4.1 per cent from April to September 2011 to average $1.50 per square foot (psf) per month in September 2011, while monthly rents for warehouse space in the eastern part of the island grew 5.1 per cent in the same six months to hit $1.44 psf.

Colliers also noted that the rents for high-specs space remained under pressure due to the ample supply of new high-specs and suburban office space in the pipeline.

Rental growth for multi-user high-specs space more than halved from 11 per cent in the October 2010 to March 2011 period to just 4.8 per cent from April to September 2011. At the end of September 2011, the average monthly gross rent for high-specs space stood at $3.28 psf.

'Growth in office rents slowed and has likely reached peak levels, resulting in less cost incentives for qualifying office users to relocate to high-specs space,' Colliers said.

'Given the cloudy economic outlook, leasing activities in the short to medium term ahead is likely to be dominated by renewals and consolidations.'

As such, high-specs rents are expected to stay stable in the year ahead, with an increase of up to 5 per cent for ground floor space, Colliers said.

Overall, business sentiments in Singapore have been adversely affected by events in the west, the report noted. It cited the latest Business Times-UniSIM Business Climate Survey, which found that close to two-thirds of the companies surveyed said prospects for the next six months are worse than a year ago.

 


Source: Business Times

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