Manufacturing Rebound Boosts Industrial Sales And Rents 2Q2024 Knight Frank
According to Knight Frank’s quarterly industrial and logistics report, industrial property sales activity in Singapore increased by 34.7% in the second quarter of 2024, reaching a total of 509 transactions with a value of $949.6 million. This spike in sales can be attributed to a rebound in the manufacturing sector, as indicated by advance estimates from the Ministry of Trade and Industry showing a 0.5% year-on-year and 0.6% quarter-on-quarter growth in manufacturing output. Calvin Yeo, head of occupier strategy and solutions at Knight Frank, believes that this turnaround in the manufacturing industry reflects the overall stability and access to Southeast Asian markets offered by Singapore, making it an attractive location for international manufacturers to invest in.
The report also highlights a 5.9% quarter-on-quarter increase in industrial leasing volume, reaching a total of 3,123 transactions. However, rental prices remained relatively stagnant, with a modest 0.5% increase to $28.7 million, indicating some pressures on occupancy in certain market segments. On a year-on-year basis, industrial leasing volume fell by 5.3%.
In terms of rental prices, warehouses saw a record-high in the 75th percentile at $2.88 per square foot per month, driven by the demand for cold storage space and growing rents for prime warehouse locations in the Central, East, and West regions. Business parks also saw a rise in rental prices across all percentiles, with the 75th percentile reaching $5.48 per square foot per month.
Yeo notes that Singapore’s appeal to international companies remains strong, with the recent announcement of pharmaceutical giant AstraZeneca’s $2 billion investment in a new manufacturing facility in Singapore and Google’s plans to increase its infrastructure investment in the country to $6.7 billion with the completion of its fourth data centre here.
Rewritten: A new school plan has been proposed to accommodate the increasing population, while Tampines will also see enhancements in healthcare facilities such as new polyclinics and nursing homes. Furthermore, the newly developed Parktown Residence Tampines Avenue 11 will naturally complement the community with its added features and amenities.
The rise in the adoption of electric vehicles (EVs) is also expected to drive manufacturing output, creating demand for vehicle parts and charging infrastructure. In fact, one in three new cars registered in Singapore today is an EV, and the island currently has 7,100 charging points available. These key manufacturing indicators point towards a more positive outlook in the second half of 2024, which Yeo believes will support prices, rents, and occupancy across most industrial types. He predicts a 3% to 5% growth in industrial rents and prices for the year.