4.0 LIGHT
14
AND HIGH-SPECS
15
INDUSTRIAL
Existing Stock
Light industrial stock (single-user and multiple-user factory,
excluding high-specs industrial) grew at a steady pace (4%)
in 2014, from 25.3 million sqm in 2013 to 26.3 million
sqm. In particular, about 83% of the multiple-user factory
space completed in 2014 was strata-titled for sale. These
developments usually had unit sizes below 250 sqm. The larger
strata-titled multiple-user factories completed in 2014 include
Premier@Kaki Bukit (61,500 sqm) and Link @AMK (47,700
sqm). There were also several major single-user factories
catering to high-tech companies that were completed in 2014.
Meanwhile, DTZ estimates that high-specs industrial stock
in Singapore rose by about 10% (146,800 sqm) from about
1.5 million sqm in 2013 to 1.6 million sqm
16
in 2014 (Figure
4.1). Similar to 2013, 2014 saw the completion of some major
high-specs industrial developments, notably by REITs, including
Aperia (62,300 sqm), a Green Mark Platinum integrated retail
and Business 1 development designed for hi-specs industries
such as ICT, engineering services, electronics and industrial
training. This also reflects the growing high-specs industrial
cluster locations such as Paya Lebar iPark. Another significant
completion was Equinix’s SG3 IBX Data Centre (29,300 sqm) at
one-north, which will be Equinix’s third data centre in Singapore
and its largest in Asia Pacific.
Figure 4.1: Net Supply (Private Light and High-Specs Industrial)
Source: JTC, DTZ Consulting & Research, March 2015
Figure 3.2: Rental Trend (Private Business Parks)
Source: URA, JTC, DTZ Consulting & Research, March 2015
Outlook
The government’s continued focus on knowledge-intensive
and higher-value industries is expected to support growth
of companies engaged in activities such as advanced
manufacturing and applied health sciences. This will help
support the demand for business park space.
While there is significant new supply expected in 2015, majority
(72%) are accounted by BTS developments, which are already
fully or mostly committed by a single anchor tenant/ end-user.
As such, rental growth in the segment is expected to stay
relatively firm. Furthermore, as median business park rents
were around 60% and 35% lower than those for Category
1 and 2
13
office buildings respectively, business parks are still
expected to benefit from the office spill-over phenomenon as
office rents continue to rise.
With office rents expected to continue to increase in 2015,
the impetus for qualifying occupiers to relocate to more
affordable options such as business parks is likely to stay
strong. Notwithstanding the moderate economic prospects,
private islandwide business park rentals are projected to grow
by about 3% to 5% in 2015.
Median Rents (LHS)
Rental Index (RHS)
5.00
110
4.50
100
4.00
90
3.50
80
3.00
70
2.50
60
2.00
50
$ per sq ft per month
Index (Base – Q4 2012)
2004
2008
2006
2010
2012
2005
2009
2007
2011
2013
2014
13 Category 1 office buildings are defined as those located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or
recently refurbished, command relatively high rentals and have large floor plate size and gross floor area, while Category 2 offices are the remaining office
buildings in Singapore that are not included in Category 1.
14 Light industrial refers to all single-user and multiple-user factory space, excluding high-specs industrial, as defined by DTZ.
15 There is currently no official definition for high-specs industrial space. According to A-REIT, they are typically vertical corporate campuses with high office
content combined with high specifications mixed-use industrial space. These type of properties house largely MNCs which wish to co-locate their manufacturing
activities with their HQ operations functions. These also include data centres.
16 DTZ’s basket of high-specs industrial properties is reviewed on an annual basis.
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
sqm
2004
2008
2006
2010
2012
2005
2009
2007
2011
2013
2015F
2014
2016F
2017F
2018F
Average Annual Net Supply for Light Industrial (2004 to 2013): 663,600 sqm
Average Annual Net Supply for High-‐
Specs Industrial (2004 to 2013): 74,300 sqm
Average Annual Completions
for Single-User and Multiple-
User Factory (2015 to 2018):
553,700 sqm
Light Industrial
High-Specs Industrial
Light and High-Specs Industrial
66 67
