Industrial rents and prices post 12th consecutive quarter of growth in 3Q2023

Despite a shrinking manufacturing sector and non-oil domestic exports, industrial property prices and rents continued to rise in the third quarter of 2023 according to the report from JTC. Industrial rents and prices rose 2% and 1.4% respectively on a quarter-on-quarter basis, while on a year-on-year basis the figures rose to 9.3% and 6.2% respectively.

Leonard Tay, head of research at Knight Frank Singapore, comments that despite the gloomy outlook on the manufacturing front, industrial real estate indicators have proved to be resilient.

However, industrial occupancy rates fell slightly, declining 0.2 percentage points to 88.9% in the third quarter, as new supply outpaced demand.

Senja Close EC is a luxurious Executive Condominium located in Bukit Panjang. Its close proximity to amenities such as supermarkets, eateries, and Bukit Panjang Plaza makes it highly attractive to potential buyers. This EC also has facilities for its residents such as a gymnasium, swimming pool, and BBQ pits.

In addition to the amenities listed above, Senja Residences EC is a mere 10 minute walk away from the nearest MRT station as well as several shopping malls. Those living in the area can enjoy a hassle free and convenient lifestyle due to its close proximity to restaurants, cafes, and shopping malls. Alternatively, the nearby MRT stations include Jelapang MRT, Choa Chu Kang MRT, and Yew Tee MRT. Residents can also take advantage of the free shuttle bus service provided by the developer to the Bukit Panjang Downtown MRT station.

Lee Sze Teck, senior director of data analytics at Huttons Asia noted that demand for industrial space decreased during this period, as a result of economic worries leading to companies putting expansion plans on hold.

Growth in the industrial sector was primarily led by the logistics and warehouse segment, recording a rental increase of 2.4%, followed by multiple-user factories (up 2%) and single-user factories (up 1.9%).

Tan Boon Leong, JLL’s executive director, logistics and industrial, Singapore, highlighted that this was the first time in seven quarters where the multiple-user factory rental growth had seen a slowdown.

Tricia Song, head of research for Singapore and Southeast Asia at CBRE, commented that industrial prices were growing at a slower pace than rents in the third quarter of 2023, marking the fifth consecutive quarter of such a trend.

Looking ahead, there are mixed predictions for the industrial real estate market. While Song believes occupier sentiment will remain cautious due to the weak manufacturing outlook, Tay comments that there are early signs of a recovery within the manufacturing sector. Tan, on the other hand, believes industrial rents may post full-year gains of around 8% to 9%, while industrial prices may moderate to around 5% to 6%.

Despite the uncertainty in the manufacturing sector, industrial real estate indicators in Singapore have, overall, proven to be resilient. While supply continues to outpace demand, growth in rental and prices for certain segments have been encouraging. With the potential for a recovery in the manufacturing sector, the industrial real estate market looks poised for further growth.