The industrial property market witnessed a slowdown in both sales and
leasing activity in Q3 this year, revealed a Colliers International
report.
Average capital values of prime freehold conventional
factory space dipped slightly last quarter, after reporting gains over
the past 16 quarters.
Specifically, average capital values of
ground- and upper-floor prime freehold conventional factory space fell
by 0.3 percent and 0.2 percent quarter-on-quarter to S$716 psf and S$657
psf respectively.
But prime freehold warehouse space saw average capital values rise, albeit at a moderate pace.
Meanwhile,
average capital values of both ground- and upper-floor prime
conventional warehouse space climbed by 0.5 percent quarter-on-quarter
to S$659 psf and S$584 psf, up from the previous 1.1 percent and 0.9
percent rise respectively.
On the leasing front, rents moderated
in the high-specs industrial space segment in Q3, with average monthly
gross rents of ground- and upper-floor premises slipping by 0.3 percent
and one percent quarter-on-quarter to S$3.29 psf and S$2.95 psf
respectively.
Tan Boon Leong, Executive Director of Industrial
Services/Project & Sales at Colliers International, said: “The
stricter enforcement on the legitimate use of industrial space by the
Government, as well as the weaker market sentiment in view of softer
economic indicators, have resulted in a sluggish take-up rate of
high-specs space during the quarter; which in turn, affected rents.”
Nevertheless,
after holding firm in Q2, average monthly gross rents for prime
conventional industrial space rose slightly in Q3, on the back of lease
renewals and higher rents imposed by landlords who recently paid high
prices for their properties.
Moving forward, the industrial
property market is expected to remain subdued for the rest of the year,
with average capital values of prime freehold conventional industrial
space dropping by up to five percent and minimal rent movement.
Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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