Thursday, October 05, 2006
[RealEdge] BT : Demand pushes industrial property occupancy rate up to 90.7%
| Published October 5, 2006  | |
| Demand pushes industrial property occupancy rate up to 90.7% THE average occupancy rate of industrial property in Singapore could be running at 90.7 per cent due to robust demand, according to a report on industrial property released by Knight Frank yesterday. Knight Frank says that about 750,000 sq ft of industrial space is expected to be completed in the third quarter. This is higher than the new supply of 420,000 sq ft which became available in the second quarter of this year. But the new supply was not enough as new factory space take-up hit 2.57 million sq ft in that quarter. As a result, the average islandwide occupancy rate hit a four-year high of 90.3 per cent then, says Knight Frank. But for the quarter just ended, Knight Frank thinks that the occupancy rate will have surpassed even that figure, climbing to 90.7 per cent. For the third quarter, business expansion and new investments in a broad range of manufacturing sectors fuelled demand for industrial space. Knight Frank says: 'The active expansions of industrial real estate investment trusts (Reits) contributed to most of the acquisitions of industrial space in the third quarter of 2006.' In addition, the report says there was also a spillover effect from the present tight office supply and rising office rentals, leading to increased demand for high specification factory buildings and business parks. Average rents for high specification factory space grew by 6.2 per cent quarter-on-quarter to $2.05 psf per month while business park space saw a 6.9 per cent quarter-on-quarter increase to reach $2.49. Leasing demand for industrial space is likely to remain healthy due to continued business expansions and healthy expectations. |
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