New data from Savills shows Singapore's industrial leasing market continued to expand in 2019, with the 10,465 deals made during the year signalling the 10th consecutive annual increase.

However, the real estate firm's report also shows this a significantly slower pace of growth of 3.1 the year-on-year (YoY).

Looking forward, Savills Singapore Executive Director of Research and Consultancy, Alan Cheong said the industries still standing are facing a lack of demand rather than cost pressures. 

"The COVID-19 outbreak has merely speeded up the early stage global realignment of supply chains away from China," he said.

Source: Savills Singapore

"We, therefore, believe that the rental downside is limited, but because of the COVID-19 outbreak we have marginally revised our rental forecast for 2020 to -1 per cent."

According to Savills, the average monthly rent for factory and warehouse space stayed flat at S$1.13 per sq ft in Q4/2019, as JTC rental indices showed signs of stabilisation.

Industrial sales volumes picked up 8.9 per cent YoY, with 1,196 factory and warehouse properties worth over S$3.1 billion changing hands in 2019.

On a quarter-on-quarter (QoQ) basis, prices of 30-year leasehold industrial properties fell by 1.7% to S$328 per sq ft, while 60-year leasehold and freehold industrial units saw a marginal uptick of 0.4% to S$438 per sq ft and 0.1% to S$680 per sq ft respectively.

Mr Cheong said in order tap into the resilient growth of business park and high-tech industrial segments, major landlords continued with their "asset enhancement plans to rejuvenate their portfolios and cater to the changing demands of new emerging industries".

Click here to download the report.

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