Singapore warehouses likely to fill up more quickly if oil prices keep rising

FURTHER increases in oil prices are expected to push occupancy levels for warehouses higher, according to an analysis by the Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore.

The research institute noted that as oil prices climb, manufacturers are likely to face higher costs of inputs and narrower margins. Additional friction may also arise from a tighter market for storage space and higher rents at industrial properties in Singapore.

On Tuesday (May 31), crude’s global benchmark Brent hit a 2-month high, with the Brent crude futures contract for July surging above US$121 per barrel. It came after China announced it would ease its Covid-19 restrictions, which ignited hopes of oil demand picking up again in the country, while European Union leaders agreed to pursue a partial ban on Russian oil.