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5.2 Rents of Multi-User Warehouse Space
According to the URA, the monthly median gross rent for
islandwide warehouse space escalated by 13.4% YoY to S$1.85
per sq ft (S$19.91 per sq m) as of 4Q 2011, after surging by
17.7% YoY in 2010 on the back of improved demand that was
supported by an economic rebound.
6. Outlook
Downside risks in the external environment will continue to
weigh on Singapore’s economic growth in 2012. Companies
that are highly exposed to global headwinds include those in
the manufacturing as well as transport and storage sectors,
although pockets of growth are expected from some clusters:
• The pharmaceutical and medical technology segments in
the biomedical manufacturing cluster on the back of an
expected higher output with improved demand;
• The electronics cluster, in which higher levels of production
are anticipated for the semiconductor, data storage and
electronic modules and components segments due to
expanded capacities and improved global demand for
chips;
• The semiconductor equipment, bonding wires and
connectors manufacturing segments within the precision
engineering cluster;
• The aerospace segment, wherein sustained demand for
repair and servicing jobs for the Asia-Pacifc region is
expected;
• The marine and offshore engineering segment is also
expected to foresee a higher level of offshore activity on
the back of secured orders; and
• The transport engineering cluster.
In addition, Singapore’s competitive edge is increasingly being
challenged by the likes of Malaysia, Indonesia and Thailand and
this is being compounded by rising wages and rents.
Nevertheless, Singapore’s head start in moving up the value
chain has positioned it ahead of other Asian cities in capabilities
and knowledge since the 1990s. This wing for investment
growth in research and development (“R&D”) could offset part
of the manufacturing investments withdrawn.
Singapore’s business-friendly environment, excellent
infrastructural facilities and high-quality and skilled workforce
as well as the close cultural connectivity to South-East Asia and
the greater China market will continue to give the country an
edge in attracting frms that value these factors over and above
business costs. The city-state’s Global-Asia positioning will
continue to encourage companies to establish a presence here.
The Economic Development Board has indicated its confdence
in Singapore’s continued attractiveness to global companies
and Asian enterprises and it expects FAI for 2012 to reach S$13
to S$15 billion in 2012, compared to 2011’s FAI of S$13.7 billion,
in spite of the prevailing global economic uncertainty.
Hence, although overriding caution in the industrial property
sector is expected to weigh on current market sentiments,
demand for industrial space could be shored up by, among other
factors, expansion in R&D functions as well as the continuing
presence or incoming of frms looking to leverage Singapore’s
Global-Asia positioning to tap on growth opportunities in Asia
and globally. This should help sustain rents at 2011’s level and
volatility in overall industrial rents should hover within a 3%
range for the whole of 2012.
Median Gross Rents of Islandwide Warehouse Space
S$ Per Sq ft / Month
2.00
1.80
1.40
1.60
0.80
1.00
1.20
0.60
0.40
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: URA/Colliers International Singapore Research
INDEPENDENT MARKET STUDY (SINGAPORE)
BY COLLIERS INTERNATIONAL
Offcial statistics on the light industrial/conventional factory market are unavailable.
The current stock of light industrial/conventional factory space is estimated by
deducting the total stock of business and science park space (sourced from the URA)
and Colliers International’s estimated total stock of independent high-specs industrial
space, from the total islandwide stock of all types of factory space (sourced from the
URA). While this includes independent single-user high-specs industrial space, it is
deemed to provide a good representation of the light industrial/conventional factory
segment as independent single-user high-specs industrial space comprised only a
small proportion of the overall factory stock in Singapore.
Potential supply includes those under construction and planned but the actual level
of new supply could increase / decrease due to changes in the status of planned
projects.
Net new demand and in turn occupancy rate are estimated based on the same
methodology adopted for supply estimation.
Potential supply includes those under construction and planned but the actual level
of new supply could increase / decrease due to changes in the status of planned
projects.
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A DECADE OF ENABLING BUSINESSES