Rents for business park space and offices have stagnated over the last six months.
This is according to research by DTZ which is part of commercial property giant UGL Limited.
Rent for business park space has remained unchanged at S$4.38 per square foot per month in the second half of 2011.
This is a contrast to the robust 6.6 per cent growth registered in the first half.
Likewise, average rent for hi-tech industrial space rose 6 per cent in the first half of 2011 but remained unchanged at S$3.00 per sq ft/month for the rest of the year.
Average rent for first storey conventional private industrial space also stalled in the second half of last year after rising 4.9 per cent in the first half to S$2.15 per sq ft per month.
The growth in rental values for these units also slowed down to 4.9 per cent last year compared to 5.1 per cent in 2010.
DTZ said this is due to the slow down in Singapore’s economy and a decline in manufacturing output last year.
Singapore’s economic growth has slowed to an estimated 4.8 per cent after the exuberant 14.5 per cent growth in 2010.
Manufacturing output fell in 2011, marred by regional supply-side disruptions from natural disasters in Japan and Thailand. Declining global demand as the Euro zone debt crisis deepens has also contributing factors.
Still, there is still a silver lining.
Capital values for industrial space have continued to rise in the second half of 2011 buoyed by investor demand.
Transactions of strata factory space rose more than 10 per cent to 1,733 in 2011, up from 1,562 transactions for the year prior.
For the whole of 2011, capital values for private industrial first storey resale spaces rose 5.7 per cent while that for upper-storey resale spaces grew by 10.8 per cent.
Source : Channel NewsAsia – 9 Jan 2012