Real estate consultancy firm Colliers International says the industrial properties market has been hit by the global financial crisis.
Its latest bi-annual survey found that rents, land and capital values of industrial properties in most cities across the Asia Pacific, except for Jakarta, contracted by up to 40 per cent.
The study of 13 key cities in the region was conducted between October 2008 and March 2009.
Colliers said that with the significant depreciation of Australia and New Zealand dollars against the US dollar, cities like Sydney, Melbourne, Auckland and Wellington have recorded a more severe decline in their rents, land and capital values.
Tokyo benefited from the strengthening of the Japanese yen against the US dollar during the period and saw improvement in rents, land and capital values.
Looking ahead, Colliers said demand for industrial properties is likely to remain weak across the region.
It forecast that many cities could see declines of up to 30 per cent in rents, land and capital value over the next 12 months, while Singapore could see a 15 per cent drop.
Nonetheless, Colliers said the mid-term outlook for Singapore’s industrial sector remains favourable.
It said some companies are taking a long-term view and investing in capabilities to prepare themselves for the upturn when it comes.
For example, Indian telecommunications giant Tata Communications is investing US$180 million in a state-of-the-art data centre in Paya Lebar, which is scheduled for completion in 2010.
Meanwhile, Abbott Laboratories will be investing US$20 million in a nutrition science research and development centre at Biopolis to develop food and nutrition products for Asia.
Source : Channel NewsAsia – 18 May 2009