According to first quarter of the year figures released recently by the Urban Redevelopment Authority (URA), the industrial property sector, in line with the overall growth of the industrial sector, saw improvements both in prices and rentals.

“The industrial property sector showed an improvement in Q1 2010 compared to the previous quarter. The price and rental indices as well as average occupancy rates increased in Q1 2010 compared to Q4 2009. This is reflective of the current positive sentiment among manufacturers on the back of a 30.0% year-on-year growth in the manufacturing sector in Q1 2010,” offered Li Hiaw Ho, Executive Director, CBRE Research.

He added that during the first quarter of 2010, the rental index for factories rose by 0.8% quarter-on-quarter, up from the 0.4% quarter-on-quarter gain during the previous quarter. The price index for factories rose by 1.5% quarter-on-quarter in Q1 2010, similar to the 1.5% quarter-on-quarter growth in Q4 2009. The average occupancy rate for factories increased by 0.4 percentage point to 92.3% at the end of March. Take-up for Q1 2010 was 231,000 sqm, down from the 265,000 sqm for Q4 2009 but a surge over the 40,000 sqm of factory space taken up in Q1 2009. 

“The rental index for warehouses rose by 3.6% quarter-on-quarter in Q1 2010, up from the previous quarter when the index remained unchanged. In the first quarter of 2010, the price index grew 1.5% quarter-on-quarter, a smaller gain compared to the 5.3% quarter-on-quarter increase in the fourth quarter of 2009. Some 4,000 sqm of warehouse space was taken up in Q1 2010, a reverse of the negative 47,000 sqm reported in the previous quarter. The average occupancy rate for warehouses also showed an improvement, increasing from 90% in Q4 2009 to 90.1% in Q1 2010,” he pointed out.

Li also noted that take-up of business park space surged from 9,000 sqm in Q4 2009 to 24,000 sqm in Q1 2010. Reflecting the increase in take-up, the occupancy rate for business park space improved from 80.8% in Q4 2009 to 81.2% in Q1 2010.