Average rental values for private industrial space stagnated in the third quarter of 2011 as leasing demand softened for industrial space, according to DTZ Research.
The average rent for hi-tech industrial space and upper-storey private industrial space stood unchanged quarter-on-quarter at S$3.45 and S$1.75 per square feet per month respectively in Q3 2011.
DTZ said the slowdown in the office sector has particularly impacted the demand for high-tech industrial space.
The average capital value of industrial space continued to rise, but at a slower rate.
The average capital value for private freehold upper-storey industrial space based on DTZ’s basket of completed properties rose 2.5 per cent quarter-on-quarter to S$405 per square feet in Q3 2011 after increasing 5.6 per cent quarter-on-quarter in Q2 2011.
Ms Chua Chor Hoon, head of DTZ SEA Research, said: “Industrial space is more affordable compared to residential and office space. Thus, investors and end-users continue to be attracted to purchase them.”
DTZ expects rents to stay flat in the near-term with downward pressure as demand for industrial space is likely to remain subdued.
It also noted that about 19.8 million square feet of private industrial space is expected to be completed in 2011 and 2012.
Source : Channel NewsAsia – 10 Oct 2011