Industrial rents recover slightly in Q1 even as occupancies slip

INDUSTRIAL space rents rebounded slightly by 0.4 per cent in the first quarter compared to a quarter ago even as occupancies fell, according to JTC's quarterly market report.

This followed a 0.6 per cent quarter-on-quarter fall in rents in the fourth quarter of 2014.

The recovery of overall industrial rents during the first quarter was buoyed mainly by rents in warehouses and business parks.

But compared to a year ago, overall industrial rents were still 2 per cent lower, JTC said.

Occupancy rate fell 0.2 per cent from a quarter ago to 90.7 per cent in the first quarter, as a 0.8 per cent increase in supply outstripped a 0.6 per cent rise in demand.

Prices of overall industrial space rose 0.7 per cent in the first quarter compared to a quarter ago, driven by a 1.6 per cent increase in prices for single-user factory space.

JTC said that in the next three quarters, about 2.1 million sq m of industrial space is expected to come onstream. Another 2.5 million sq m is expected to be completed next year. This represents 5 per cent of the current available stock, significantly higher than the average annual supply of around 1.5 million sq m and annual demand for one million sq m in the past three years.

As of end-February this year, there were some 1,700 units in uncompleted multiple-user developments totalling more than 500,000 sq m available for sale as at end-February. More than 50 of these unsold units were larger than 1,000 sq m in size.