"The inability of industries to fully pass on the cost from supply chain disruptions to customers is constraining rental increases."
Says Alan Cheong, Savills Research.

• Although leasing volume in Q1/2022 continued to increase, the rate of change has slowed to 3.5% year-on-year (YoY)
• Savills’ average monthly rent for prime multiple-user factories increased by 3.6% quarter-on-quarter (QoQ) to S$1.90 per sq ft with prime warehouse and logistics properties falling marginally by 0.7% QoQ to S$1.45 per sq ft in Q1/2022.
• Strata industrial sales activity remained relatively stable with 423 transactions in Q1/2022, compared to 460 in Q1/2021.
• Savills’ basket of industrial properties showed that prices for freehold properties increased by 1.1% QoQ to S$729 per sq ft while 60-year leaseholds rose by 0.9% QoQ to S$447 per sq ft in Q1/2022.
• From Savills’ basket of industrial properties, 30-year leasehold industrial properties increased at a faster pace of 3.5% QoQ to S$305 per sq ft in Q4, ending six consecutive years of price decline.
• Coupled with the scarcity and steady demand in Mapletree Business City and one-north regions, Savills’ prime business park monthly rents rose by 0.6% QoQ to S$5.89 per sq ft. Meanwhile, Savills’ standard business park properties monthly rents slipped by 0.1% QoQ to S$4.00 per sq ft in Q1/2022.
• The average monthly rent for Savills’ high-spec industrial basket increased by 1.4% QoQ to S$3.61 per sq ft in Q1/2022.
• The inability of industries to fully pass on the cost of price increases due to supply chain disruptions is capping rental increases and we are forecasting rents for multiple-user factory space to rise by up to 2% YoY while warehouse & logistics space may be limited to up to 5% YoY.