According to EdgeProp, Singapore’s industrial real estate market has just observed its highest occupancy rate since its previous peak in 1Q2016, as reported by JTC Corporation’s recent industrial information for 4Q2020. According to the findings, the overall occupancy rate for industrial real estate increased to 89.9%, and it is followed by three successive quarterly increments within the market.
Additionally, in the last quarter, the market perceived an increase in industrial property rents and prices by 0.1% quarterly and 1.0% quarter on quarter, respectively. This increase in occupancy rates mainly originated from the warehouse portion of the market. Still, occupancy in both factory spaces and warehouses for rent
also observed a rise during the term.
Industrial sector continues to gain
Brenda Ong of Cushman & Wakefield states that due to the trends accelerated by the onset of COVID-19, such as the higher adoption rate of e-commerce, the industrial sector has greatly benefitted in the way of higher demand for vital logistics facilities. Going off on a tangent, demand for electronics and semiconductors has also increased due to the widespread adoption of Work-from-home (WFH) and ongoing preparations for the advent of 5G wireless networking.
An additional benefit that the industrial property market has welcomed is the continued expansion of the country’s biomedical manufacturing industry, which observed rapidly expanding output levels in 2020. Annually, both the biomedical and electronics manufacturing industries saw an increase of 23.7% and 11.9%, respectively, in 2020, according to Cushman & Wakefield.
CBRE states that for the year 2021, the total amount of upcoming factory space for rent
supply will be 9.68 million square feet. Most of the fresh supply will come from the submarket for single-user factories, estimated to introduce an additional 5.45 million square feet into the market, an increase of 0.83 million square feet from the previous estimate in 3Q2020.
On a different note, despite the weakened economy in 2020, there’s a rising demand for space in business parks, according to Cushman & Wakefield. Recent JTC statistics reveal that rental prices in this submarket dipped by 1.1% in the entirety of 2020, exhibiting the strongest performance amongst other industrial sectors.
General outlook of the market
The industrial property sector will still be leading in the real estate recovery along with other components with the economic rebound in the manufacturing industry. On the other hand, logistics spaces, business parks, and data centres, in particular, will benefit most from heightened R&D, e-commerce implementation, more technology implementation and data broadband usage respectively.
Meanwhile, warehouse rental are anticipated to be even more resilient as they gain from the surge in eCommerce trends
quickened by the crisis. Similarly, so will newly developed and city-fringe business parks and high-spec industrial units with the presence of connectivity, premium specifications, and limited supply.
While the industrial sector has observed its highest occupancy rate in four years, it will continue to grow in the near future. This will see a possible increase in the number of businesses or individuals interested in using these spaces.
At LHN Group, there is an array of units available - varying from commercial, office, industrial to residential use. In fact, we have industrial spaces for rent near Aljunied
and Admiralty, as well as many other kinds of units across Singapore. Find a suitable type of space to accommodate your business requirements at LHN Group.