Professional Documents
Culture Documents
All-Industrial Rental Index Declines at An Increasing Rate
All-Industrial Rental Index Declines at An Increasing Rate
All-Industrial Rental Index Declines at An Increasing Rate
Industrial Property
Image: JLL
a FACEBOOK
d TWITTER
h PINTEREST
k LINKEDIN
Knight Frank in September 2020, released its Asia-Paci c Warehouse Review which
tracked prime Asia-Paci c warehouse rents across 17 key cities, registering an
average change of -0.02% half-on-half despite COVID-19. Going forward, Knight
Frank expects average rental growth between 3% to 5%.
Asia-Paci c warehouse rents market conditions for 16 of the 17 cities tracked are
https://blog.icompareloan.com/all-industrial-rental-index/ 1/6
4/15/2021 All-Industrial rental index declines at an increasing rate
expected to remain stable or improve over the next 12 months. The positive
outlook for growth in the second half of 2020 is due to higher space appetite from
e-commerce players and essential commodities.
Tokyo recorded the highest half-on half rental growth at 4.2%, due to healthy take
up rates and the lack of available prime assets within the city.
Shanghai warehouse markets recorded the healthiest rental growth compared to
Beijing and Guangzhou, at 3% half-on-half, led in part by a pickup in storage
demand from cold chain operators.
Tim Armstrong, Head of Occupier Services & Commercial Agency, Asia Paci c at
Knight Frank says, “The outlook for industrial markets remains resilient due to
robust demand from the e-commerce and essential goods sectors, as well as
additional requirements for inventory storage to mitigate supply chain
disconnects.”
Daniel Ding, Head of Capital Markets for Land & Building, International Real
Estate & Industrial, Knight Frank Singapore, shares, “It has become clear that the
winner coming out of this health crisis is very much some specialist sub-sectors
within the industrial asset class, including institutional-grade warehouses. We
expect rents to stabilise and gradually trend upwards in the coming months.”
https://blog.icompareloan.com/all-industrial-rental-index/ 2/6
4/15/2021 All-Industrial rental index declines at an increasing rate
6.8
Industrial property market emerged one of the most resilient across the property
sectors says a recent analysis of JTC Q2 2020 Industrial property statistics.
“The Singapore industrial property market emerged one of the
most resilient across the property sectors (retail, office, hotel,
residential), amid the global coronavirus (COVID-19) pandemic, as
seen by continued warehouse demand supported by the
accelerated adoption of e-commerce and government’s stockpiling
https://blog.icompareloan.com/all-industrial-rental-index/ 3/6
4/15/2021 All-Industrial rental index declines at an increasing rate
accelerated adoption of e-commerce and government s stockpiling
of essential goods.
This came after a 0.1% decline in Q1 2020. This also marks the highest quarterly
decline since Q3 2017, and brings the All-Industrial rental index to a level at 14.2%
below the peak in Q2 2014.
However, overall occupancy rates improved 0.2 percentage point (ppt) to 89.4% in
Q2 2020 from 89.2% in Q1 2020, mainly due to an 0.8 ppt increase in warehouse
space; more space was leased due to stockpiling and storage during the quarter.
Other segments saw a decline in occupancy levels, with business parks falling the
most.
Factory
The single-user factory segment saw rents declining 1.0% QOQ which helped
https://blog.icompareloan.com/all-industrial-rental-index/ 4/6
4/15/2021 All-Industrial rental index declines at an increasing rate
pushed up occupancy by 0.4 ppt to 91.1% (+0.4 ppt). While rents of multi-user
factories held up slightly better at -0.5% QOQ, occupancy declined by 0.4 ppt to
87.5%. All planning regions saw a decline in rents, with the worst decline seen in
the East at -2.1% QOQ.
Business Park
Business Park rents held up best among all segments, with only a marginal decline
of 0.2% QOQ in Q2 2020. That said, this is the rst rental decline seen for business
parks since Q4 2018, as the global COVID-19 pandemic dampened business
sentiment and leasing activities in business parks and high-spec spaces.
Occupancy rate also declined by 0.7 ppt QOQ to 85.2% as businesses paused
expansion activities and net new demand remained negative for the second
consecutive quarter.
Warehouse
Warehouses saw a surge in net new demand to 1.3 million sq ft from -125,000 sq ft
in Q1 2020, as the pandemic resulted in national stockpiling of essential goods and
accelerated e-commerce growth. Lower rents (-0.7% QOQ) in Q2 2020 drove
occupancy up by 0.9 ppt to 88.3%.
Prices
The All-Industrial price index fell 1.1% QOQ in Q2 2020, dragged by the multi-user
factory segment which saw a -1.5% QOQ decline, while single-user factory also
witnessed a -0.6% QOQ decline.
Colliers notes that the price index for multiple-user factory has not seen an
improvement for seven consecutive quarters. Prices in all planning regions fell in
Q2 2020, with the West and North region seeing the largest drop at -4.0% QOQ and
-3.5% QOQ respectively.
a FACEBOOK
d TWITTER
h PINTEREST
k LINKEDIN
W H AT ' S Y O U R R E A C T I O N ?
0 0 0 0 0
C O M M E NT S
https://blog.icompareloan.com/all-industrial-rental-index/ 5/6
4/15/2021 All-Industrial rental index declines at an increasing rate
OUR SITE
FACEBOOK
https://blog.icompareloan.com/all-industrial-rental-index/ 6/6