Singapore business park vacancy declines after six straight quarters of growth

The vacancy eased to 21.7% in Q2.

Following six consecutive quarters of increase, a report by Savills reveals that the islandwide vacancy level for business parks in Singapore eased by 0.3 of a ppt QoQ to 21.7% in Q2. 

Although there was an improvement in the occupancy rate in the one-north area, the occupancy rate for the older developments in the outskirts remains under pressure. 

Here’s more from Savills:

The demand in the East Planning Region has been softening as the key takers – businesses in technology and back-end banking operations – are downsizing or relocating to less-costly area. It is also becoming more challenging for the other older cluster, International Business Park, where vacancy rate has been hovering above that in Changi Business Park. 

While the index of business park rents tracked by JTC slipped by 0.1% QoQ, after over two years of growth, Savills’ standard business park monthly rents posted a muted increase of 0.1% QoQ to S$4.07 per sq ft in Q2. Nonetheless, the newer clusters continue to lead the overall rental growth for business parks, with Savills’ prime business park monthly rents increasing by 3.3% QoQ to S$6.31 per sq ft in Q2. 

High-spec industrial spaces, especially those with good amenities and accessibility, continue to remain attractive. Alongside the strong rental level of recent developments, high-spec industrial rents are holding up. The Savills’ high-spec industrial basket posted an average rental increase of 0.6% QoQ to S$3.96 per sq ft in Q2.