Any takers? Industrial occupancy rates bogged down by space spillover

Expansion is too much of a good thing for industrial SREITs.

Singapore’s industrial space will increase by 6.8 million square meters between 2014 and 2015. A report by Fitch shows that this 16% increase will constrain rental increases until the next year.

Most of these new spaces will come on stream between 2014 and 2015.

Occupancy rates for 1Q14 remain healthy at over 90%, but even this figure is still far from 2009’s occupancy peak.

According to the report, “The sector’s property assets grew by 7% in 2013, to SGD18.8bn. Most of this growth was on account of property revaluations, with about a third of the growth stemming from asset enhancement initiatives. Industrial SREITs accounted for 21% of sector assets in 2013, and consist of seven entities.”