Industrial rents flat in second half of 2011

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After moderate growth in H1 2011, average rents for industrial space were stagnant over the last six months, according to a DTZ report.

Average rents in H1 2011 for first-storey conventional private industrial space climbed to S$2.15 psf (4.9 percent per month) but slowed down in H2 2011 due to a decline in exports and manufacturing.

The 4.9 percent growth in rental values for first-storey private industrial space for the whole of 2011 was slightly below the 5.1 percent posted in 2010.

Economic growth slowed to an estimated 4.8 percent in 2011 after a huge 14.5 percent growth in 2010.

“The slowdown in the office property market also spilled over to the higher-end of the industrial property market. The average rent for business park space stagnated at S$4.38 psf per month in H2 2011 after growing 6.6 percent in H1 2011,” said Cheng Siow Ying, Executive Director, Business Space at DTZ.

“Likewise, average rents for hi-tech industrial space rose six percent in H1 2011 and remained unchanged at S$3.00 psf per month for the rest of 2011. With the average rent of decentralised offices in Tampines Finance Park only slightly higher at S$4.95 psf per month in Q4 2011, there is ample choice for qualifying business occupiers.”
    
On the other hand, capital values for industrial space continued to rise in H2 2011, sustained by investor demand. 2011’s strata factory space transactions, proxied by caveats lodged, climbed by over 10 percent to 1,733 from 1,562 transactions in 2010.

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