Industrialists looking to diversify their supply chains for cheaper storage option

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Rents for industrial properties in Singapore increased by 1% over a quarter in the 1Q2022, which is the highest quarter-over-quarter growth that the sector has experienced since 3Q2013. This quarter’s performance also marked six consecutive months of increase according to a report on the market from Colliers.

The prices in the industrial segment have also been a success, rising 3.1% q-o-q last quarter and is the largest rate of price growth in the quarter since the beginning of 1Q2014. “Due to construction delays previously experienced that have caused delays in the construction process, the bulk of the pipeline for industrial supply is expected to be in operation during the year ahead, the bulk being factories. Furthermore, 25.90 mil sq ft more industrial space is expected to be completed by the end of this calendar year.” Colliers says. Colliers.

In over the course of three years the annual average pipeline supply is projected to reach 12.92 million square feet almost double that of 6.46 million square feet that was installed between the years the years of 2019 and 2022. “This expected increase in pipeline supply could slow rental growth and price as well as provide an array of options for industrialists at the same at the same time,” the consultancy says.

In the future, industrialists may begin to look at diversifying their supply chains and explore alternatives for storage that are less expensive according to Lynus Pook the executive director of Industrial services for Colliers Singapore. He says that the demand in industrial facilities, particularly the most high-end warehouses as well as business parks will continue to be fueled by growing industries such as media, food logistics, logistics, technology, and biomedical industries.