The industrial space saw the most rental growth (10.7% year-over-year) in multi-user plants in 2023, thanks to newer, better-located stock, according to JTC’s 4Q2023 industrial report. As of the end of last year, 92.2% of multi-user plant projects were full.
Pearl Lok, head of capital markets and investment sales at ERA Singapore, says that industrial prices will rise by between 3% and 5% year-over-year in 2024. Multi-use factories and warehouses, especially transportation areas in good sites, will be the main drivers of this growth. She thinks that rental rates will rise at the same rate as prices, between 3% and 5% per year in 2024, with multi-use workshops and stores driving this growth. The rate of rental growth is slower than the 10.7% year-over-year rise in multi-user workplace rents in 2023.
Lok was speaking at the “Exploring Industrial Property Trends and Food Factory Investment” seminar. The event was put together by EdgeProp Singapore and Chiu Teng Group. Over 60 people came to the event, which took place at the CT Foodnex sales hall in Mandai Estate.
She says that the 2.4 million square feet of new stock that came on the market this year is the reason why price growth in the multi-user factory space has been slower this year. JTC Bulim Square (1.69 million sq ft) and One KA@MacPherson (92,247 sq ft) are two big new buildings that should be finished in 2024.
A report from ERA said that there was 52.9 million square meters (569.1 million square feet) of open commercial space. It took 9.69 million square feet of new production to finish in 2023. Lok says that most of the space that will be available in the future will be single-user space. This type of space is usually used by MNCs or companies for their own operations, and the lease terms are short, lasting between 20 and 30 years. She also says that IGLS workplace rooms for various users last between 30 and 60 years.
In Singapore, there aren’t many private business areas because of this, she says. “Most freehold land is held very tightly.”
Harrison Food Building is one example of a freehold industrial development that is redeveloped as its own solely by Powermatics Data System, that why it can retain its freehold tenure. It has a total of 42 units and an anciliary canteen and stands at 8 storey high. Price start from $2.8xm+ or $1,7xx psf.
This development is likely highly sought after due to its strategic city fringe location and is also near to major expressways and MRT Station that provide convenience for logistics and even for employess heading to work.
Lok from ERA says that the number of food businesses that aren’t stores grew at an average rate of 3.2% per year from 2012 to 2019. In 2021 and 2022, the rate of growth sped up to 9.6% and 8.5%, respectively. Lok says that the growth is due to changes in people’s lives, like the rise of work-from-home jobs and the need for more comfort.
Building more food centres has also been pushed by the government as part of its “30 by 30” plan to meet 30% of the country’s nutritional needs by 2030 and ensure food security. In order to support agri-tech and environmental technology, the 500ha Sungei Kadut Eco-District industrial area and the Northern Agri-Tech and Food Corridor are being built.
