S'pore industrial sector has strong future

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Rents of industrial space in Singapore remained firm in the fourth quarter of 2011, ranging between S$1.7 psf and S$2.1 psf per month for factory and warehouse space, according to a Savills report.

It added that monthly rents for high-tech space in the country remained at S$3.6 psf to S$4.0 psf.

In Q4 2011, capital values continued to forge ahead of rents as investment interest shifted from the residential sector.

During the same period, the average capital value of 60-year leasehold factory and warehouse space rose six percent to S$477 psf for ground units and five percent to S$399 psf for upper-storey space.

Moving forward, Savills expects rents to stabilise next year and capital values to rise at a more moderate rate of around three percent.

“Notwithstanding slower economic growth and increasing supply, we expect rents to stabilise and capital values to appreciate by around three percent in 2012, underpinned by a shift of investment interest from the residential sector and the reinstatement of the 50 percent sub-letting cap for JTC premises,” the report said.

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