In the second quarter of 2023, industrial leasing volume increased by 6.1% to 3,298 tenants

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The amount of leasing in the industrial market grew to 3,298 tenancies in the 2Q2023, an increase of 6.1% y-o-y, according to the Savills Research report. In a press release issued on September 18, Savills Singapore says that the growth resulted from more leases for multi-user factory space, which grew by 10.6% y-o-y and is the highest level since 2021. The lease transactions in single-use factories and warehouse segments decreased in 5.7% and 1.3% per year and 1.3%, respectively.

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Based on a sample of industrial properties that are tracked by Savills and Savills, the costs for leaseholds with a 30-year or 60-year term industrial properties were up 1.4% and 2.4% per month to $320 psf, and $495 per sq ft, respectively.

The report forecasts more rises in rents and prices throughout the remainder of the year for most industrial property kinds despite increasing negatives and slowing development in the production industry. The demand for multi-user factories will likely be driven by the emergence of emerging growth areas like high-value manufacturing, and rents are expected to rise up to up to 4% or 6%.

The rents for warehouses are predicted to increase from 3-5%% or 5% because of the growing demand for high-end and modern logistical spaces as well as the limited availability of high-quality warehouses.

Alan Cheong, Savills Singapore’s executive director of research and consultancy, says that rents as well as prices for warehouses and industrial spaces will remain on the rise for the remainder of the year. “One reason that keeps these two in check is inflation. The other factor is higher interest rates. Since the majority of landlords are financially stable this puts them in a better position to transfer their higher interest costs on to the tenants” Cheong adds.