Rentals and rates for industrial spaces in Singapore decline in the second quarter of 2020

The downward trend is predicted to extend in the coming quarters because of the outbreak 

According to JTC Corp, an industrial land and infrastructure agency, rentals and prices of industrial spaces dropped year on year in the second quarter of the year. Moreover, they expect the downward slump to continue in the next quarters because of the pandemic, reported The Straits Times.  

The prices of industrial spaces plummeted by 1.7 percent year on year and 1.1 percent quarter on quarter, whereas the rents fell by 0.8 percent year on year and 0.7 percent quarter on quarter.  

On the other hand, the occupancy rates withstood the pressure by increasing around 0.1 percentage point year on year and 0.2 percentage point quarter on quarter to 89.4 percent, boosted primarily by warehouse spaces and single-use factories. 

“Some transactions were pre-committed before the ‘circuit-breaker’ measures, and there was a relative lack of recent market transactions,” JTC emphasised since some of the data might not have properly shown the economic impact brought by the pandemic. 

 More: Pandemic raises concerns over office investments, prompts switch to warehouses

The agency added that the “circuit breaker” has impeded most construction activities and some project owners could not offer full evaluations on the progress of construction. As a means of data collection and reporting, JTC said that the forecasted completion date of projects should be extended for another three months from the initially scheduled completion date. 

By the end of June, approximately 1.3 million square metres of new industrial space was predicted to be completed in the second half of 2020. However, the latest figures reveal that only 0.2 million sqm of new industrial space was completed in the second quarter, suggesting that new industrial spaces won’t accomplish the earlier estimation of 2.1 million sqm for 2020. 

“We can expect further delays in completion for some industrial building projects, as project owners and contractors adjust to meet the Building and Construction Authority’s Safe Restart requirements,” concluded JTC.