Chart of the Day: Industrial space rents buck downward trend

It registered a 1.0% increase to $4.20 per sq ft.

Based on Colliers International’s research, the average monthly gross rent for business park premises on an islandwide basis bucked the general downward rental trend to register a 1.0% QOQ increase to $4.20 per sq ft in Q3 2016.

"This was due mainly to the higher achievable rents at a recently completed development with better specifications that was added into the rental basket during the quarter. Excluding this new addition, the average rent was relatively stable," Colliers said.

In contrast, rents for independent or standalone high-specs industrial buildings located outside the science and business parks continued to face downward pressure, amidst slow take-up. To some extent, these independent highspecs industrial premises also faced competition from newer conventional industrial properties where rents were lower.

However, the rate of rental decline has moderated. During the quarter, the average monthly gross rent for ground-level independent high-specs space eased by 0.3% QOQ to $3.23 per sq ft in Q3 2016, compared to Q2 2016’s steeper 3.6% QOQ slide.

Similarly, the average monthly gross rent for upper-level premises fell by 1.4% QOQ to $2.87 per sq ft in Q3 2016, a slower pace of decline than the 3.3% QOQ drop in the second quarter.

Meanwhile, rents of prime conventional industrial space continued to post modest declines in Q3 2016. According to Colliers International’s research, the average monthly gross rents for ground- and upper-level prime conventional factory premises eased by another 0.4% QOQ
and 1.1% QOQ to $2.32 per sq ft and $1.78 per sq ft, respectively, in Q3 2016, following the previous quarter’s 0.9% QOQ and 1.6% QOQ decline.

For prime conventional warehouse space, the average monthly gross rent for ground-level space dipped 0.4% QOQ to $2.32 per sq ft in Q3 2016. For upper-floor premises, the average monthly gross rent fell by 2.4% QOQ to $1.64 per sq ft over the same quarter. In comparison, ground-level prime conventional warehouse space saw stable rents in Q2 2016, while rents for upper-floor premises eased by 1.8% QOQ over the same period.