Higher supply and weaker demand to put downward pressure on industrial property rents: Colliers

The consumer price index also expanded 0.5% q-o-q in 4Q2024, reducing from the 1.2% growth in the past quarter. Last year, industrial property prices climbed 2.1%, much less than half of the 5.1% increase reported the year prior to.

In addition, increased trade protectionism has brought uncertainty into worldwide markets, possibly affecting service confidence and investment decisions.

On the flip side, Colliers anticipates industrial demand to continue to be supported by the semiconductors, logistics and advanced manufacturing industries. It additionally anticipates industrial leasing ventures to see a progressive ramp-up over time as policies come to be clearer and market views strengthen, underpinned by the continuous recovery in the chip cycle.

Industrial property rates and rental fees in Singapore are expected to regulate this year in the middle of greater supply and weaker need, according to a February research study record by Colliers. The firm is projecting both overall yearly industrial rental and cost growth to moderate to in between 0% to 2% in 2025, compared to the 3.5% growth chalked up for both in 2024.

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The higher supply, combined with enhanced caution among occupants because of persistently high rate of interest and escalating business expenses, is expected to proceed dampening rental improvement.

The low-key outlook happens as JTC’s 4Q2024 data suggested a market place that is “losing steam”, says Colliers. The JTC All Industrial rental index charted a 17th consecutive quarter of development in 4Q2024, climbing 0.5% q-o-q and bringing complete progress for the year to 3.5%. Nonetheless, this notes a substantial decline from the 8.9% rental development logged in 2023.

In the meantime, provided the bump in supply and the projected moderation in leas, this might be a good year for occupants with even more alternatives involving market, states Colliers. “New commercial advancements, outfitted with even more modern requirements, could motivate extra services to transfer from older, ageing production offices to more recent jobs,” claims Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers.

According to Colliers, the source of commercial space is expected to grow this year, with over 2.5 times the supply in 2024 coming on stream before lessening from 2026 onwards. “This rise in supply has caused the present supply-demand discrepancy with sectors of the market currently viewing upcoming supply with slower precommitments or finished ventures with lower tenancy,” the file states.


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