Figure 4.2: URA Rental Trend
(Private Warehouse Space)
Outlook
While potential supply pressure is expected to be relatively
moderate, demand for traditional storage and distribution
facilities is likely to be tempered, given the subdued outlook
of the transport and storage sector. Private warehouse median
rents are expected to decline by about 4% to 6% in 2016.
Newer and better equipped warehouse facilities, e.g. those
with ramp-up facilities, are likely to face a smaller decrease in
rents, compared to traditional warehouses.
Nonetheless, there are opportunities in e-commerce. Many
traditional storage and distribution facilities are morphing into
fulfilment centers, taking advantage of rising consumerism
and untapped potential in Asia. This will benefit the demand
for warehouse space in Singapore, as Singapore grows into a
regional logistics hub with leading logistics groups expanding
their footprint. The recent opening of DHL Supply Chain
Advanced Regional Centre and Kuehne + Nagel’s Singapore
Logistics Hub further underscore the commitment of major
players to house their operations in Singapore to support
a diverse range of industries in Asia. With the challenging
economic outlook, rentals for logistics and distribution
facilities are expected to ease in 2016. Over the longer term,
growing global and regional trade ties stemming from AEC
and TPP will benefit Singapore logistics businesses through
wider market access.
1.00
0
1.20
20
1.40
40
1.60
60
2.00
100
2.20
2.40
2.60
2.80
3.00
120
$ per sq ft per month
1.80
80
2008
2006
2010
2012
2009
2007
2011
2013
2015
2014
Median Rent
75th Percentile Rental
Rental Index
Source: JTC, URA, DTZ Consulting & Research, March 2016
.81
A-REIT ANNUAL REPORT
2015/2016
