‘Significantly higher’ supply of industrial space expected till end-2016: JTC

Even as the prices, rentals and occupancy rates of industrial space continue to fall, 3.8 million sqm of industrial space is estimated to be available from now till end-2016, according to JTC Corporation in its quarterly market report for industrial properties for Q3 2015 released on Thursday (Oct 22).

In the next quarter, about 798,000 sqm of industrial space, including about 100,000 sqm of multiple-user factory space, is expected to be added to the supply of industrial property. This follows the increase in supply of industrial land and space by the Government in recent years, said JTC.

According to JTC, the “significantly higher” supply of industrial space will likely exert further downward pressures on occupancy rates. Prices and rentals of industrial property have also continued to fall in tandem with the moderation in occupancy rates.

Overall, the occupancy rate of the industrial property market fell by 0.2 per cent on a quarter-on-quarter basis to 90.8 per cent, with a 1 per cent increase in supply outstripping a 0.8 per cent increase in demand. On a year-on-year basis, the occupancy rate fell by 0.1 per cent.

Meanwhile, prices of industrial space continued to soften. In the third quarter of 2015, the price index of overall industrial space fell by 0.3 per cent on both a quarter-on-quarter basis and year-on-year basis. The decline in price indices contrasts with the average annual increase of 8 to 9 per cent over the past four years, said JTC.

Rental indices also fell, and all industrial fell 0.8 per cent compared with the previous quarter, and dropped 1.6 per cent compared with the previous year.

According to JTC, around 2,300 units totaling about 657,000 sqm located in uncompleted strata-titled developments are currently available for sale, with the majority of these units located in the North region of Singapore.

Source : Channel NewsAsia – 22 Oct 2015

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