Chart of the Day: Which segments of Singapore’s industrial property market will decline?

The outlook for 2015 is mixed.

Analysts forecast different trends for different segments of Singapore’s industrial property market, amid stringent controls imposed by JTC and other factors such as tightening supply.

According to a report by Colliers International, the average monthly gross rents of ground-level prime conventional factory space, which are limited in supply and typically more sought after, stayed flat at $2.53 per sq ft as of 1Q 2015, after easing by 1.6% QoQ in 4Q 2014.

A similar trend was seen in the average monthly gross rents of prime conventional warehouse space, with ground-level rents holding constant at $2.49 per sq ft as of 1Q 2015 after last quarter’s 1.2% QoQ slide.

In contrast, the average rents of business park premises strengthened further in 1Q 2015. Based on Colliers International’s research, the average monthly gross rent of business park space which rose marginally by 0.7% QoQ in 4Q 2014, posted another 1.5% QoQ gain to $4.17 per sq ft as of 1Q 2015. This came mainly on the back of limited supply and higher rental expectations for newer developments that enjoyed healthy take-up, particularly in one-north.

Meanwhile, in the multi-user industrial space segment where competition for qualifying tenants is expected to stiffen amid mounting supply pressures, rents are foreseen to slide further, by a total of up to 4% in 2015, for prime conventional industrial space. However, rents for business parks and independent high-specs buildings are expected to continue to buck the downward trend and strengthen by a total of up to 3% and 6.5% in 2015, respectively, on the back of a tightening in supply.