2.0 Business and Science Parks
2
Existing Supply
3
Private
4
business park stock rose by 13.7% (190,000 sq m) in
2015, the highest since 2011 (Figure 2.1). All completions in
2015 were single-user Build-to-Suit (BTS) facilities.
Figure 2.1: Net Supply, Demand and Occupancy
(Private Business Park)
10%
50%
80%
20%
60%
90%
30%
70%
100%
83.7%
0%
40%
0
50,000
-50,000
100,000
200,000
250,000
sqm
150,000
Net Supply (LHS)
Demand (LHS)
Occupancy (RHS)
2008
2006
2010
2012
2009
2007
2011
2013
2015
2014
2016F
Average Annual Net Supply between 2006 and 2015: 108,800 sq m
Average Annual Demand between 2006 and 2015: 92,500 sq m
Source: JTC, Urban Redevelopment Authority (URA), DTZ Consulting & Research,
March 2016
Notably, Rigel Technology obtained Temporary Occupation
Permit (T.O.P.) for its headquarters, Rigel Innovation Hub
(13,000 sq m), in Changi Business Park. Also located in
Changi Business Park, DBS Asia Hub Phase 2 (5,800 sq
m) and Soo Kee Jewellery Research Facility (10,700 sq m)
were completed. Other completions included DSO National
Laboratories Phase II (37,200 sq m) in Singapore Science
Park and Mediacorp Campus (63,700 sq m) at Ayer Rajah
Avenue in one-north.
As at Q4 2015, there was 1.6 million sq m of private business
park space, constituting only about 4% of private industrial
stock in Singapore (39.1 million sq m). Majority is located in
the Central Region (844,000 sq m, 53%
5
), while the remaining
is distributed evenly across the East Region (393,000 sq m,
25%) and West Region (342,000 sq m, 22%).
Potential Supply
About 153,000 sq m of business park space, of which 85,000
sq m is in Mapletree Business City Phase II, is expected to
complete in 2016. All potential supply is located in the Central
Region. There is no known potential supply of business park
space in 2017 and 2018.
Demand and Occupancy
Despite slowdown in the overall industrial market, the
business park market remained healthy. Demand increased
significantly by 143% to 194,000 sq m in 2015. In H1 2015,
demand for business parks was supported by companies
which qualified for business park space. Examples included
Canon and Oracle, which relocated from Keppel Bay
Tower and Suntec City respectively to Galaxis in one-north.
Pharmaceutical and Infocomm sectors were two sectors that
contributed to the demand for business parks in H2 2015.
Investment in the pharmaceutical sector is supported by
the entry of medical technology accelerators such as Israel-
based Trendlines and Incubator of China.
On the back of strong leasing activities, islandwide occupancy
for business parks increased by 2.6%-points to 83.7% in Q4
2015. Occupancy in the East Region (e.g. Changi Business
Park) increased the fastest by 5.7%-points, followed by
2.6%-points in the Central Region (e.g. Singapore Science
Park and one-north) and 0.3%-points in the West Region
(e.g. International Business Park).
Rents
The quality of business parks and significant cost savings are
attractive propositions for companies to move their qualifying
activities e.g. back offices, research & development from
offices to business parks. Office rental growth, particularly in
H1 2015, provided momentum to rental growth in business
parks, as business parks and office rents are closely related.
Whilst the rental gap between business parks and office has
been largely consistent over the last five years, business park
rentals fluctuate less historically, giving more stability and
predictability to occupiers. The URA median monthly rents
6
for private business parks trended upwards by 4.9% to $4.29
per sq ft ($46 per sq m) in 2015 (Figure 2.2).
2 According to JTC, science parks where the primary activity is R&D are included in the Business Park category from Q3 2002.
3 All supply and demand figures are in terms of Net Lettable Area (NLA), unless stated otherwise.
4 This report focuses on private industrial and office space.
5 Some figures in this report may not add up due to rounding off.
6 Median rentals in this report are from the REALIS database and refer to gross rent including service charge and GST. They have not been subjected to
computation e.g., moving average. Rental information is dependent on the number of rental transactions in the quarter and is obtained from returns filed with
the Inland Revenue Authority of Singapore (“IRAS”). When a property is let out, the property owner has to inform IRAS the details of the tenancy agreement.
153,200
sq m
.77
A-REIT ANNUAL REPORT
2015/2016
