Office Rental Trends in Singapore

In the first quarter of the year, the average monthly rental for factory units was increased by five cents; it now stands at $1.75 psf in case of the ground floor and the rest of the upper floors stand at $1.40 psf. In case of the warehouses, the average monthly rental rose to $1.65 psf for the ground floors, which is 3.1% higher than the previous price while the rest of the floors witnessed a massive increase of 8%, with the new price now standing at $1.35 psf.

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The director of CBRE stated in their report that the capital value for industrial properties was growing at a much faster rate than its rental values. One of the chief reasons which caused this rise in the price is that a number of investors felt blocked out by the government’s new cooling policy in the residential sector, turned towards industrial properties instead. Since the industrial sector do not have a very austere restriction, a number of residential investors switched to the industrial sector. This has off course helped in enhancing the demands for strata-titled industrial units. Some who made the switch include the sophisticated real estate investment trusts who aim to get back to their previous mode once the government relaxes its cooling policy.

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The government looks at the situation with a positive outlook and is hopeful that the demand for industrial space will still remain healthy, even though it is predicted that the rents of the industrial properties will face a steady rise.