Tuesday, June 5, 2012

Industrial rents likely to dip only 3%: Report

Straits Times: Tue, Jun 05
CAUTION may be the prevailing sentiment in the industrial property sector, but expansion of research and development (R&D) functions and strong economic fundamentals will contain the fall in industrial rents to about 3 per cent this year, said a Colliers International report.

Land and capital values continued to rise between October last year and March this year by between 5.1 per cent and 13.5 per cent, it said. But this was lower than the 10 to 16 per cent in the previous review period.

The leasing market was weighed down by industrialists' cautious business expansion plans as Singapore's economic growth moderated, as well as oncoming supply pressures.

Gross monthly rents for factories inched up 1.3 per cent to average $1.52 per sq ft (psf) by the end of March. The average gross monthly rents for warehouse space in the eastern part of the island stayed flat at $1.44 psf.

The high-specs industrial sector was hit too as industrialists reined in expansion and capital investment plans. The sector also suffered from easing spillover demand from the office sector in line with its falling rents and rising stock of suburban office space.

Rents for high-specs industrial space stood at $3.50 psf per month, based on a new basket of high-specs space tracked...
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