Singapore to see nearly 7m sq ft more industrial supply this year
Supply is expected to outpace demand.
According to Colliers, as backlogged industrial supply continues to come on stream in Singapore this year, the bulk of which is due in H2 2023, new supply was observed to outpace new demand and lower occupancy levels during H1 2023.
With a remaining supply of 6.7 mil sf during 2023, and an average of 10.5 mil sf from present till 2025, Colliers said higher supply will continue to moderate rental and price growth; compared with the average net absorption of 7.7 mil sf from 2021 till present. Supply is expected to stay ahead of demand, which could also provide more options for occupiers.
Here’s more from Colliers:
Industrial indicators such as manufacturing output and NODX have exhibited their eighth consecutive month of contraction during Q2 2023, and PMI its fourth consecutive month of contraction, largely driven by an extended slowdown in the semiconductor cycle, coupled with macroeconomic uncertainties and prolonged elevation of interest rates.
As such, the external environment is set to remain a key source of weakness for some time with further export softness ahead. All these factors may serve to slow both rental and price growth during the coming quarters.
Nevertheless, demand for higher specification industrial assets will continue to support the industrial market, underpinned by demand from industries such as advanced manufacturing, logistics, biomedical, and food sectors; with several corporations expanding their facilities or looking to establish a presence in Singapore, which will help to prop up industrial demand.