Singapore business park space vacancies at a record low of 14.4% in Q1

This is the lowest vacancy rate since Q4 2020.

The vacancy rate for business park spaces in Singapore fell by 1.1 ppt QoQ to 14.4% in Q1/2022, the lowest since Q4/2020. 

According to Savills, owing to the healthy take-up rate of prime business park developments such as Mapletree Business City and one-north, the vacancy rate in the Central Planning Region eased further by 2.3 ppts QoQ to a record low at 6.2% in Q1/2022. Coupled with the scarcity and steady demand in Mapletree Business City and one-north regions, Savills’ prime business park monthly rents rose by 0.6% QoQ to S$5.89 per sq ft. 

Here’s more from Savills:

While the vacancy rate in the West Planning Region fell by 1.8 ppt QoQ to 28.1% in Q1/2022, that in the East Planning Region continued to worsen to 24.2% (+2.3 ppts QoQ) due to softer demand from ESR Bizpark @ Chai Chee and Changi Business Park. To attract tenants to fill up the vacancy, some landlords of non-prime business park developments generally maintained their rental expectations. Hence, Savills’ standard business park properties monthly rents slipped by 0.1% QoQ to S$4.00 per sq ft in Q1/2022. 

What was interesting was that some firms upgraded from flatted factories to more prime and accessible high-spec industrial developments and yet managed to achieve rental savings by rightsizing and consolidating operations from various locations. 

Particularly, new highspec industrial projects such as UBIX and other well-located developments continue to experience good take-up rates. These market movements could have helped generate rental growth, resulting in an increase of 1.4% QoQ in the average monthly rent for Savills’ high-spec industrial basket to S$3.61 per sq ft in Q1/2022.