Singapore strata industrial transactions up 28% in 2Q2022: Savills

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August 16, 2022 3:34 PM SGT
The increase in sales activity was led by transactions of multiple-user factory deals which climbed 25.3% q-o-q to 475 deals.
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SINGAPORE (EDGEPROP) - According to an industrial real estate market report by Savills Singapore, the local strata industrial sales activity last quarter jumped 28% q-o-q to a total of 512 transactions. This is the highest q-o-q increase since 3Q2014, the consultancy says.
The increase in sales activity was led by transactions of multiple-user factory deals which climbed 25.3% q-o-q to 475 deals. Savills says that most of the transactions occurred at two industrial developments — West Connect Building and Mega@Woodlands.
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“Transactions in this sector are likely backed by local SMEs that acquired ramp-up facilities with modern specifications and reasonable remaining tenures for their own business operations,” says Savills.
The consultancy says that a domestic injection of investment into the sector is likely if the external economy slows, as local investors and owners create demand for prime multiple-industrial spaces and allow for greater capacity to accommodate new work orders.
Savills expects rents for multiple-user factory spaces to increase between 10% and 12% y-o-y for the whole of 2022.
Elsewhere in the industrial market, prime business park monthly rents continued their upward trend, rising 0.7% q-o-q in 2Q2022 to reach $5.93 psf. This is based on a basket of business park-zoned spaces monitored by Savills.
The report attributes the upward trend to the scarcity and steady demand for business parks, especially in Mapletree Business City, one-north, and the Labrador prime industrial locations.
“The industrial and logistics market remains one of the most resilient sub-asset classes across the real estate market,” says Alan Cheong, executive head of research, Singapore.
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Although a slowdown in economic activity in 2H2022 was expected to drag down industrial rents, SMEs’ need to stock up motivated them to take on more space instead, thus supporting rents, says Cheong.

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