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Warehouse rents peaked in Q2 2012: Colliers
Jul 11, 2012
by Cheryl Tay Rents of prime upper-floor conventional warehouse properties have exceeded their 2008 peak by 17 percent, according to Colliers International. The latest quarterly industrial property market research revealed that Singapore's industrial property market for Q2 2012 had fared well. The rise in market sentiment resulted in strong performance, despite renewed fears over the Eurozone debt crisis. The industrial leasing market performed better in Q2 2012, buoyed mainly by lease renewals and expansion, as well as relocation of firms' business operations. Over the same period, prime ground floor conventional factory space recorded a marginal increase of 0.4 percent quarter-on-quarter or an average monthly gross rent of S$2.40 psf, 2.8 percent below the Q3 2008 peak of S$2.47 psf. Prime upper floor conventional factory space increased one percent quarter-on-quarter to S$2.10 psf, a 16 percent increase from Q4 2008's S$1.81 psf. "In general, industrial buildings with better specifications or ramp-up developments that cater to 20-foot containers can command higher rents than conventional warehouse developments," said Tan Boon Leong, Executive Director of Industrial Services at Colliers International. He added that there is "always a healthy demand for industrial properties that feature better facilities and design." "However, there are a limited number of good quality industrial buildings in prime locations, especially those within walking distance to MRT stations. These contributed to the upward trend in rents across the various categories of industrial premises."