INDEPENDENT MARKET STUDY BY DTZ
S I N G A P O R E
4.0 Logistics and Distribution Centres
12
Existing Supply
Private warehouse stock rose by 5.7% (472,000 sq m) from
8.3 million sq m in 2014 to 8.8 million sq m in 2015. Many
of the completed warehouses were built-to-suit logistics
facilities developed by third-party logistics
13
companies,
as well as industrialists and Small-and-Medium Enterprises
(SMEs) requiring logistics and storage facilities. These include
Space@Tampines (57,000 sq m), a warehouse developed
by Warehouse Logistics Net Asia (52,000 sq m), a ramp-up
logistics facility developed by CWT Project Logistics
(51,000 sq m), DHL Supply Chain Advanced Regional Centre
(75,000 sq m) at Tampines LogisPark, and Kuehne + Nagel
(43,000 sq m) at Pioneer Crescent.
Potential Supply
About 1.3 million sq m of private warehouse space is in
the pipeline from 2016 to 2018. The average annual supply
between 2016 and 2018 (424,000 sq m) is higher than
average annual supply of 310,000 sq m in the past decade.
Pipeline supply is predominantly single-user warehouse
(85%, 966,000 sq m), including facilities developed by major
logistics players, e.g. Hankyu Hanshin Express and Singapore
Post. The logistics industry, especially logistics providers, will
remain one of the largest demand drivers for warehouses in
Singapore.
Demand and Occupancy
Reflecting the muted growth in transport & storage sector in
2015, net demand (398,000 sq m) was lower than net supply
(472,000 sq m). This led to a slight decline in occupancy by
0.4%-points, from 91.8% in Q4 2014 to 91.4% in Q4 2015
(Figure 4.1).
12 There are no official statistics on logistics and distribution centres in Singapore. The report primarily uses private warehouse data from JTC.
13 Various logistics companies have engaged third-party facility providers for the development of their logistics facilities.
14 JTC’s 75
th
percentile warehouse rentals are adopted as a proxy for logistics and distribution facilities, which are better specified than conventional warehouses.
82%
88%
96%
86%
92%
98%
90%
94%
100%
80%
84%
0
100
200
300
600
700
800
‘000 sq m
400
500
Net Supply (LHS)
Demand (LHS)
Occupancy (RHS)
2008
2006
2010
2012
2009
2007
2011
2013
2015
2016F
2017F
2018F
2014
Source: JTC, URA, DTZ Consulting & Research, March 2016
91.4%
Average Annual Demand (2006 to 2015): 308,000 sq m
Average Annual Net Supply (2006 to 2015): 310,000 sq m
Average Annual Completion (2016F to 2018F): 424,000 sq m
Figure 4.1: Net Supply, Demand and Occupancy
(Private Warehouse Space)
While weakness in the manufacturing sector weighed down the
growth of the warehouse market, the logistics and distribution
segment received support from the government. In 2015,
the government announced pilot programmes to boost
productivity in the logistics sector. This includes a $20 million
grant to support integrated and shared delivery systems, with
emphasis placed on the “last mile” of delivery.
Rents
JTC’s warehouse rental index fell marginally by 1.6% in 2015,
in line with a slight decline of 0.4%-points in occupancy
(Figure 4.2). However, many older warehouses in the rental
index are not suited for modern logistics and distribution
operations, which may have led to slight rental decline in
overall warehouse rental index. Meanwhile, rental market for
logistics warehouse is generally more resilient compared to
conventional warehouses. This is evident as the 75
th
percentile
warehouse monthly rentals
14
(a proxy for logistics warehouse
rentals) rose by 3.2% to $2.59 per sq ft ($28 per sq m), while
the median rental (a proxy of conventional warehouse rental)
remained unchanged at $2.00 per sq ft ($22 per sq m) in
2015. The rental gap between median and 75
th
percentile
warehouse monthly rentals also increased slightly from $0.51
per sq ft ($5.5 per sq m) in 2014 to $0.59 per sq ft ($6.4 per
sq m) in 2015.
.80
A-REIT ANNUAL REPORT
2015/2016
