Singapore industrial sales triple to S$3.1b in Q3

This total value is from 456 transactions during the quarter.

On the back of expectations and the eventual announcement of a long-awaited interest rate cut by the US Federal Reserve (Fed), sales activity of industrial properties in Singapore picked up, according to a recent Knight Frank report. 

The increase in manufacturing activity amid a positive outlook for the sector will likely drive demand and result in increased sales volume of industrial properties. Industrial property sales activity in Q3 2024 surged, with the total sales value growing 199.6% q-o-q and 205.6% y-o-y to reach S$3.1 billion from a total of 456 transactions (Exhibit 1). 

Here’s more from Knight Frank:

Majority of the large sales took place in August, as investors pulled the trigger on deals expecting interest rate cuts and a return of positive carry. The prominent transactions included the sale of the S$1.6 billion portfolio comprising seven industrial properties by Lendlease and Warburg Pincus from a portfolio owned by Blackstone and Soilbuild, the 51% stake sale of 20 Tuas South Avenue 14 for S$444.6 million by ESR LOGOS REIT, and the 49% stake sale of Elementum for S$272.0 million to a sovereign wealth fund from Brunei, making up the bulk of industrial sales activity during the quarter. 

In Q3 2024, there were 3,304 industrial leasing transactions, a growth of 5.8% q-o-q and 2.3% y-o-y. With the increase in leasing activity, the total value of rental transactions grew 1.6% q-o-q to S$29.1 million. 

Rents of all industrial properties island-wide showed marginal quarterly growth of 0.8% and 0.9% in the 25th percentile and median categories, but fell 3.6% quarterly in the 75th percentile. With improving manufacturing output and sentiment, island-wide rents for single-user factory spaces rose across all rental percentiles, increasing from S$1.52 psf pm, S$1.79 psf pm, and S$2.22 psf pm in the previous quarter to S$1.55 psf pm, S$1,80 psf pm, and S$2.47 psf pm in the 25th, median, and 75th percentiles respectively.