The sales activity increased by 25.3% q-o-q to 475 deals led by transactions of multiple-user factory

In a real-estate industrial report from Savills Singapore, the local industrial sales in the strata last quarter increased by 28% over the previous quarter to reach an overall 548 transactions. This is the largest q-o-q increase since 3Q2014. consulting firm states.

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The rise in sales was driven by transactions involving multi-user factory deals which increased 25.3% q-o-q to 475 deals. Savills states that the majority of the deals took place in two industrial projects -Mega@Woodlands and the West Connect Building. West Connect Building and Mega@Woodlands.

“Transactions in this area are likely to be backed by local SMEs that have acquired ramp-up facilities that meet modern requirements and decent remaining terms to run their own businesses,” says Savills.

The company suggests that a domestic infusion of capital into the industry is possible when the economy in the outside slows as local owners and investors generate demand for prime industrial space and create more capacity to handle new work orders.

Savills expects the rents for multi-user manufacturing spaces to increase by 10% to 12% over the course of 2022.

In the industrial market and in the business park market, prime monthly rents continued to climb in trend, climbing 0.7% q-o-q in 2Q2022 to $5.93 per sq. ft. The data is from the basket of commercial park-zoned properties that are monitored by Savills.

According to the report, this rising trend to the shortage and constant need for commercial parks particularly located in Mapletree Business City, one-north and Labrador top industrial areas.
“The market for logistics and industrial is one of the most durable sub-asset classes within the real estate sector,” says Alan Cheong who is the executive head of research at Singapore.

Even though a decrease in economic activity during 2H2022 was predicted to bring lower industrial rental costs, SMEs’ need to buy more stock has prompted them to expand their space, thereby boosting rents, according to Cheong.