Pick-up in industrial property market in Q2, says Colliers International

Property consultant Colliers International has released research reports covering industrial, investment sales, office and retail space in Singapore for the second quarter of the year.

In the industrial property market, the second quarter saw a pick-up after a temporary lull in the first quarter.

Colliers added that both the sales and leasing markets experienced a flurry of activity.

The average monthly gross rentals for prime factory and warehouse spaces surged by 6 per cent to 7 per cent on-quarter, their fastest quarterly growth in three years.

Colliers noted that at the end of last month, prime ground floor factory and warehouse space commanded average monthly gross rents of S$2.25 per sq ft and S$2.34 per sq ft, respectively.

The second quarter saw the value of total investment sales in the sector amount to S$9.82 billion, down 1.6 per cent from the first quarter. Sales continued to be dominated by the private sector, which contributed to 52.4 per cent of all investment sales, while the public sector accounted for the remaining 47.6 per cent.

However, private sector deals fell by 22 per cent on a quarterly basis to about S$5.15 billion between April and June.

Meanwhile, in the office space sector, Colliers said competition for tenants kept the rental growth of Grade A offices in the single-digit territory.

In the Raffles Place and New Downtown micro-market, the monthly gross rents of Grade A offices grew by 7 per cent on quarter to reach S$10.40 per sq ft. This is a little slower than the 8 per cent gain recorded in the first quarter.

The overall average occupancy rate for Grade A office space in the Central Business District (CBD) also continued to dip to 93.5 per cent in the second quarter, following its first correction in six quarters in the first three months when it slipped 0.1 percentage point to 94.2 per cent.

And finally, in the retail space sector, Colliers said a buoyant tourism market and upbeat consumer confidence kept prime retail rents “healthy” in the second quarter of this year.

Prime retail rents in good quality malls on Orchard Road held steady at the past six quarters’ level of $38.50 per sq ft per month.

Likewise, the average monthly gross rents for similar quality space in the Regional Centres in the second quarter remained unchanged from the previous quarter at $33.60 per sq ft per month.

Source : Today – 14 Jul 2011

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