Industrial Leasing Transactions 58 Q O Q 3Q2024 Knight Frank

Vanessa LimIndustrial leasing activity experienced a boost in the third quarter of 2024, driven by the resurgence of the manufacturing sector. According to data from Knight Frank Singapore’s latest quarterly industrial and logistics report, there was a 5.8% increase in industrial property leasing transactions which reached a total of 3,304 leases. The rental activity also showed a positive growth of 1.6% from the previous quarter, with the total value climbing to $29.1 million. On a year-on-year basis, there was a 2.3% increase in leasing activity compared to the third quarter of 2023.The rise in leasing activity was fuelled by the 9.9% expansion of the manufacturing sector in the third quarter of 2024, as indicated by the Ministry of Trade and Industry’s advance estimates. All manufacturing sectors, except for biomedical manufacturing, recorded an increase in output. This ultimately led to the increased demand for industrial space in Singapore’s property market.In August, data by the Economic Development Board revealed that the country’s total manufacturing output, excluding biomedical manufacturing, grew 27.5% year-on-year. The surge in output was largely driven by the electronics cluster, which saw a 49.1% increase year-on-year. This can be attributed to the low semiconductor production base in the previous year as well as the high demand for electronics.In terms of industrial property rental prices across the island, there was a quarter-on-quarter growth of 0.8% in the 25th percentile and 0.9% in the median categories in the third quarter of 2024. However, there was a 3.6% drop in rental prices in the 75th percentile category. Despite this, rents for single-use factory spaces saw an increase across all percentiles. The 75th percentile category recorded the highest growth, with a 11% quarter-on-quarter increase to $2.47 per square foot per month (psf pm). This was followed by the 25th percentile category, which saw a 2% growth to $1.55 psf pm, and the median category, which recorded a 0.6% increase to $1.80 psf pm.Aside from the rebound in the manufacturing sector, Knight Frank’s report also highlighted the optimistic outlook in the industrial property market, driven by the long-awaited interest rate hike by the US Federal Reserve. This resulted in a surge in industrial sales activity, with a 199.6% quarter-on-quarter increase to $3.1 billion across 456 deals in the third quarter of 2024. On a year-on-year basis, this figure jumped by 206%.The sales volume in August was largely boosted by several major deals, with investors keen on securing deals in anticipation of interest rate cuts and a return of the positive carry. The biggest transaction in August was the sale of a portfolio of seven industrial properties owned by Blackstone and Soilbuild Group to a joint venture between Lendlease and private equity group Warburg Pincus for $1.6 billion. Another notable transaction was the acquisition of a 51% stake in an industrial building at 20 Tuas South Avenue 14 by ESR LOGOS REIT for $444.6 million. Ho Bee Land also sold a 49% stake in Elementum, a biomedical sciences development in Buona Vista, to a Brunei sovereign wealth fund for $272 million.Looking ahead, Calvin Yeo, head of occupier strategy and solutions at Knight Frank Singapore, believes that the industrial real estate market will continue to thrive. He predicts that with the electronics sector leading the growth in manufacturing, there will be an increase in market activity in the industrial sector, especially with the expected interest rate cuts. He also expects the transaction volume in the industrial market to gain momentum, particularly in the sales of multiple-user factory spaces and warehouses. With the anticipation of a more favourable borrowing environment, Yeo believes that both individual buyers and private equity funds will start to make their move in acquiring assets for business use or investment.In terms of rental prices and property values, Yeo believes that they will remain stable for the rest of the year and experience further growth in 2025. To stay updated on the latest listings for Industrial Real Estate properties, check out the Ask Buddy website where you can find useful information and resources such as price trends for industrial property sales, past industrial sale transactions, and price comparisons between commercial and industrial properties.

Rewritten:

Parktown Residence is a unique and all-encompassing development that boasts exceptional connectivity, extensive amenities, and a top-notch living environment. Its innovative design seamlessly blends contemporary homes with lively retail, dining, and communal areas, offering residents a seamless urban lifestyle. The collaboration of renowned developers, UOL Group, CapitaLand, and SingLand, has resulted in an iconic project that is sure to attract those seeking a sophisticated and convenient living experience in the heart of Tampines. To experience Parktown Residence for yourself, visit the Parktown Residence Showflat.