Savills: Industrial leasing volume climbs 6.1% to 3,298 tenancies in 2Q2023

By Nur Hikmah Md Ali
/ EdgeProp Singapore |
Connexis at Fusionopolis located at the one-north business park (Photo: Savills Singapore).
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SINGAPORE (EDGEPROP) - Leasing volume in the industrial market rose to 3,298 tenancies in 2Q2023, up 6.1% y-o-y, according to a Savills Research report. In a press release on Sept 18, Savills Singapore says that the increase was due to more tenancies signed for multiple-user factory spaces, which went up 10.6% y-o-y and is the highest since 2021. However, leasing transactions for single-use factory and warehouse segments fell by 5.7% and 1.3% y-o-y, respectively.
Based on a basket of industrial properties tracked by Savills, the prices for 30-year and 60-year leasehold industrial properties increased by 1.4% and 2.4% q-o-q to $320 psf and $495 psf, respectively.
The report expects further growth in prices and rents for the rest of the year in most industrial property types despite escalating headwinds and subdued growth in the manufacturing sector. Demand for multiple-user factories is likely driven by new growth areas, such as high-value manufacturing industries, while rents are forecasted to increase by 4% to 6%.
Rents for warehouses are also expected to grow by 3% to 5% due to the strong demand for modern and high-specification logistics spaces and the limited supply of quality warehouses.
Alan Cheong, Savills Singapore’s executive director for research and consultancy, notes that both rents and prices for industrial and warehouses should continue to rise for the rest of the year. “One factor keeping these two afloat is inflation. The other is higher interest rates. As most landlords are financially strong, it puts them in better stead to pass their higher interest expenses to tenants,” Cheong adds.
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