Singapore business park vacancy hits record highs since 2014

The vacancy rate rose to 19.4% in Q2.

A Savills report recently revealed that Singapore’s islandwide vacancy level for business parks worsened again for the third consecutive quarter, rising by 0.7 of a ppt QoQ to 19.4% in Q2 2023, the highest since 2014. 

Although areas such as one-north recorded healthy take-up, the vacancy rate in the Central Region eased by 0.4 of a ppt QoQ to 7.3% in Q2. 

Here’s more from Savills:

However, CleanTech Park and ESR Bizpark @ Chai Chee saw lower occupier demand with more premises being vacated, driving the vacancy rate in West and East Planning Region to a record high at 41.9% (+2.4 ppts QoQ) and 26.3% (+0.7 of a ppt QoQ) respectively. Nonetheless, some landlords could have lowered their rental expectations to keep their premises occupied. This might have led to a 1.0% QoQ decline in Savills’ prime business park monthly rents to S$5.89 per sq ft in Q2. 

On the other hand, some landlords of the standard business park properties with better accessibility and amenities might have better negotiating power to raise their rents after experiencing quarters of rental decline. As a result, the monthly rents of Savills’ standard business park properties recorded an uptick of 3.2% QoQ to S$4.11 per sq ft in Q2, a reversal of a two-quarter decline. 

Owing to the prime-quality specifications of high-spec buildings, the occupier demand for such spaces remained strong, hence resulting in further rental growth in Q2. According to Savills’ highspec industrial basket, the average monthly rent increased 2.3% QoQ in Q2 to S$3.83 per sq ft.