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Industrial prices, rents to 'stabilise' as supply tapers, says JTC
THE falls in industrial prices and rentals are showing signs of moderation and JTC expects them to "stabilise" in tandem with occupancy rates as new supply starts to taper in the coming years.
Industrial rentals dipped just 0.1 per cent in the fourth quarter of 2017, compared to a decline of 1.1 per cent in the third quarter.
For the full year of 2017, rentals fell 2.8 per cent, compared to a full-year decline of 6.8 per cent in 2016.
As for industrial prices, they fell 1.1 per cent in the latest quarter compared to the third quarter, culminating in a 5.7 per cent decline for the full year. This was still lower than the full-year decline of 9.1 per cent in 2016.
Transaction volume in the fourth quarter, however, remained low, falling by around 19 per cent compared to a year ago, and was down by more than half compared to three years ago.
Occupancy rates rose 0.3 percentage point from the third quarter to reach 88.9 per cent in the fourth quarter due to the take-up of newly completed warehouse space, JTC said.
JTC said that in 2018, a total of 1.6 million square metres of industrial space, including 361,000 sq m of multiple-user factory space, is estimated to come onstream. This is only slightly more than the average annual demand of around 1.3 million sq m of industrial space in the past three years.