Singapore single-user factory rents up 1.2% in Q2
Meanwhile, multiple-user factory rents grew 3.0%.
According to a recent Colliers report, rental indices for multiple-user and single-user factories in Singapore have increased by 3.0% and 1.2% respectively.
“Rents were supported by flight to quality moves in high specification multi-user factories and continued demand from the biomedical and advanced manufacturing industries. These facilities are also able to cater to tenants with smaller space requirements,” the report added.
Here’s more from Colliers:
Nonetheless, the healthy supply for factories may outpace new demand, with 61% of upcoming supply during H2 2023 consisting of single-user factories. With continued uncertainty and higher costs, occupiers may become more cautious in their expansion plans, thereby impacting demand.
Warehouses registered a rental increase of 1.4% QOQ, down from the 2.8% growth during the previous quarter as more supply came on stream. Colliers has observed that demand for newer and high specification warehouses remained strong; while older warehouses were also sought after by occupiers with less demanding requirements.
With warehouses making up only 22% of the future supply for H2 2023, overall warehouse rental growth may moderate further in the coming quarters as a weaker economy translates to less stockpiling, and as occupiers focus more on operational efficiency than expansion.
Business Park rents have risen by 1.3%, accelerating from last quarter’s 0.6% increase, supported by flight to quality moves and driven by assets in the One-North precinct.
However, despite tight vacancies at the city fringe assets, island-wide occupancies continued to decline as supply outpaced demand, falling by 0.7 pp. Rental growth and occupancies may ease as more supply comes on stream, coupled with slowing enquiries and economic growth.