Singapore factory, warehouse rents dip in Q1

Rents for factories, warehouses and other industrial spaces in Singapore fell slightly during the first quarter of 2014 as firms became more cautious about expansion, Colliers International said on Tuesday.

The real estate consultancy estimated that rents for ground floor factory and warehouse space fell 0.8 per cent in the first quarter from the last three months of 2013. For upper floor units, the decline in rents was as high as 1.8 per cent.

Rents for independent high-spec space declined by 0.3 per cent.

“Firms appeared to be channelling resources towards driving productivity instead of business expansion, taking heed from the government to increase productivity amid a tight labour market,” said Brenda Ong, executive director of industrial services, project and leasing at Colliers.

The drive to reduce costs had, in some instances, led to the relinquishing of space, she added, citing British bank Barclays which has announced plans to give up space at Changi Business Park.

Colliers predicted that rents could fall further this year due to the large supply of new industrial space coming onto the market.

For the whole of 2014, rents of independent high-specs space could soften by up to three per cent, while prime conventional industrial space could experience rental correction of up to six per cent.

But business park rents are likely to hold relatively steady in 2014, as downward rental pressure on older premises and developments with higher vacancies would likely be mitigated by the higher achievable rents for newer and recently renovated business park developments.

Source : Channel NewsAsia – 8 Apr 2014

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