It was a tough fourth quarter for Landlord JTC Corp after experiencing a sharp fall in the start of its industrial space.
In ready-built factory space, 21,200 square metres lease terminations have exceeded the 20,000 square metres of new space leased, leaving a negative start of 1,200 square metres.
It was a noticeable deterioration during the Q3, when JTC reported its first depressing net take-up for its factories of 500 square metres since 2004.
In prepared industrial land, the group stayed in a positive territory with 17.5ha net take-up. However, the figure is considered less than the half that is perceived in the Q3.
The entire terminations of the group’s facilities attained a five-year high last year, increasing to 108,000 square metres. Smaller number of tenants ended their ready-built factory space during Q4, as compared to the third.
Some 323 companies have already ended their leases, of which most of them are in multi-storey factories, rise from 318 firms last 2007.
In the segment of occupancy, it was at a 10-year high of 96.8% last year. For the entire year, ready-built facilities grow 4% a year ago.
Take-up of prepared land declined 41% to 200.9ha. Overall, 62 firms have terminated leases, an increase on the 53 firms on the previous year.
Deteriorating conditions of the market forced JTC to grant 7,700 clients a 15% lease rebate for a year, beginning 1 January. The move originated from property experts who foreseen that the industrial sector will be further hit by the deterioration economic climate.
Companies look forward to renegotiate lesser rentals and move out or rent out space, said Tan Boon Leong, the director of industrial sales at Colliers International.
He assumes the vacancy rate of the industrial sector will increase once the office rents go down nearer high-tech space rent – currently hovering about $3.50 to $4.50 per square feet.