Singapore Prime Business Park Rent Unchanged In Q3
SINGAPORE – Data from Savills showed that after four quarters of steady growth, monthly rents of prime business parks here remained unchanged at S$5.93 psf during the 3rd quarter as compared to Q2 2022, while that for standard business park edged up from S$4.03 psf to S$4.04 psf, according to a research published by the property consultancy on Friday (11 November, SGT).
Savills said among industrial properties, business park was the only segment that saw a drop in vacancy rate in Q3 2022 from 14.9 percent during the preceding quarter. It was likely led by an increase in appetite for leasing business park space amidst the tightening of office supply.
“Although one-north and International Business Park (IBP) recorded higher vacancy level in Q3, the islandwide vacancy level for business park space eased by 0.1 percentage point quarter-on-quarter to 14.8 percent due to higher take-up in the Changi Business Park (CBP) and CleanTech Park locations.”
“Nonetheless, vacancy levels in areas such as Science Park, IBP and CBP remained under pressure due to locational factors that lead to weaker connectivity to main transport nodes. Moreover, business consulting firms, which formed the main bulk of the tenants in CBP, are largely downsizing their premises as their businesses were disrupted by remote working arrangements.”
Consequently, most owners of business parks continued to keep their rents competitive to fill up vacancies. This led to a marginal gain of 0.2 percent quarter-on-quarter in the monthly rents of standard business parks.
Moreover, the property consultancy revealed that rents of high-spec industrial properties increased by 1.1 percent quarter-on-quarter to hit a record of S$3.69 psf, as companies seek prime office-like industrial spaces.
Even though the external environment grows more challenging and Singapore’s economy is forecasted to slow down, demand for industrial spaces – especially modern high specification warehouses, as well as high-spec industrial properties and business parks with superb connectivity and amenities – would still be underpinned by growth sectors like logistics, food, biomedical, and precision engineering.
“Coupled with the rise in service charges, rents are expected to continue on an upward trend as landlords pass on higher business costs to tenants,” Savills added.