JTC Quarterly Market Report 1Q2021.Pdf

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JTC Quarterly Market Report 1Q2021.Pdf QUARTERLY MARKET REPORT Industrial Properties First Quarter 2021 SINGAPORE INDUSTRIAL PROPERTIES As at First Quarter 2021 Stock & Occupancy mil sqm 50Available.1Stock 90.0% Business Park Occupancy Rate 2.2 Multiple-User Warehouse Factory 11.4 11.1 0.1%-pt Compared to Previous Qtr Single-User 25.4 Factory 0.8%-pt Compared to Previous Yr *Figures in chart are in mil sqm Rental Price 0.6% 0.9% 0.9% 1.3% Compared to Compared to Compared to Compared to Previous Qtr Previous Yr Previous Qtr Previous Yr Outlook on Upcoming Supply Expected Completion 1.4 mil sqm 1.6 mil sqm Multiple-User Single-User 2021 2 .4mil sqm Factory Factory mil sqm mil sqm 2022 0.2 0.8 1.6 mil sqm Business Park Warehouse EXECUTIVE SUMMARY 1 In 1Q 2021, occupancy rate for the overall industrial property market rose by 0.1 percentage points on a quarter-on-quarter basis and 0.8 percentage points on a year-on-year basis to 90.0%. Delays in completion continue to persist. While 1 million sqm of industrial space was originally expected to be completed in 1Q 2021, actual completions were only about 131,000 sqm. Among the market segments, occupancy rates for multiple-user factory space rose by 0.5 percentage points on a quarter-on-quarter basis to 89.0% amid rising demand. By contrast, the occupancy rates for the single-user factory, business park and warehouse segments all fell. 2 In line with the broad recovery of the economy, prices and rentals have continued to rebound. In 1Q 2021, price and rental indices of all industrial space rose by 0.9% and 0.6% respectively as compared to the previous quarter. However, the price and rental indices still fell by 1.3% and 0.9% respectively year-on-year. 3 As at end March 2021, around 2.4 million sqm of new industrial space is expected to be completed in the next three quarters of 2021. Of the upcoming supply, single-user factory space makes up about 44%, multiple-user factory space makes up 31%, while the remaining 25% comprises warehouse and business park space. 4 As the economy starts to recover in 2021, the demand for industrial space is projected to increase. Any potential rise in occupancy is likely to be tempered by new completions and the increase in supply into the market. As such, prices and rentals are likely to remain stable. JTC will continue to monitor the market closely and support the needs of industrialists. Overview of Price, Rental and Occupancy Rate movements for 1Q 2021 % Change 4Q 2020 1Q 2021 Over Over Previous Previous Quarter Year All Industrial 87.3 88.1 0.9 -1.3 Price Multiple-User Factory 90.2 91.0 0.9 -1.7 Single-User Factory 78.3 79.2 1.1 -0.6 All Industrial 89.6 90.1 0.6 -0.9 Multiple-User Factory 87.3 88.0 0.8 -0.6 Rental Single-User Factory 95.5 95.7 0.2 -1.0 Business Park 112.1 112.2 0.1 -1.0 Warehouse 83.7 84.1 0.5 -1.1 All Industrial 89.9% 90.0% 0.1 0.8 Multiple-User Factory 88.5% 89.0% 0.5 1.1 Occupancy Single-User Factory 91.0% 90.9% -0.1 0.2 Rate1 Business Park 85.8% 85.1% -0.7 -0.9 Warehouse 89.9% 89.8% -0.1 2.3 Note: 1 The % change refers to absolute change over previous year/quarter. STOCK & OCCUPANCY As at the end of 1Q 2021, there was 50.1 million sqm of industrial space. In 1Q 2021, occupancy rate for the overall industrial property market rose by 0.1 percentage points on a quarter-on-quarter basis and 0.8 percentage points on a year-on-year basis to 90.0%. Delays in completion continue to 50.1 mil sqm 90.0% persist. While 1 million sqm of industrial space was originally expected to be Available Stock Occupancy Rate completed in 1Q 2021, actual completions were only about 131,000 sqm. Among the market segments, occupancy rates for multiple-user factory Q-o-Q Y-o-Y space rose by 0.5 percentage points on a quarter-on-quarter basis to 89.0% 0.1 0.8 amid rising demand. By contrast, the occupancy rates for the single-user %-pt %-pt factory, business park and warehouse segments all fell. In particular, occupancy rates for business park space fell more sharply by 0.7 percentage points on a quarter-on-quarter basis and 0.9 percentage points on a year- Change in Stock on-year basis. Occupancy (‘000 sqm) Rate (%) 800 92 600 90 400 88 200 86 0 -200 84 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2021Q1 Change in Available Stock (LHS) Change in Occupied Stock (LHS) Occupancy Rate (RHS) Multiple-User Factory Single-User Factory 11.4 mil sqm* 25.4 mil sqm* 91.1 90.7 91.0 91.0 90.9 88.5 89.0 87.9 87.5 87.8 135 91 98 106 65 71 29 48 41 1 18 8 11 -14 -3 2020Q1 2021Q1 2020Q1 2021Q1 Business Park Warehouse 2.2 mil sqm* 11.1 mil sqm* 89.9 89.8 88.3 89.1 87.5 86.0 85.4 85.8 85.2 85.1 118 93 88 6960 49 27 3 7 8 10 7 7 -2 - -2-19 -1 -8 -11 2020Q1 2021Q1 2020Q1 2021Q1 Change in Available Stock (‘000 sqm) Change in Occupied Stock (‘000 sqm) Occupancy Rate (%) * Available Stock Note: The figures for industrial stock are in terms of net floor area. RENTAL Q-o-Q Y-o-Y In line with the broad recovery of the economy, rentals of industrial 0.9% space continued to rebound across all market segments. In 1Q 2021, 0.6% the rental index of all industrial space rose by 0.6% on a quarter-on- quarter basis, following a 0.1% quarter-on-quarter increase in the previous quarter. However on a year-on-year basis, the rental index still Rental Index (Private Industrial Space) fell by 0.9%. 2012Q4=100 120 100 90.9 90.3 89.5 89.6 90.1 80 60 2016Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021Q1 Multiple-User Factory Single-User Factory Q-o-Q Y-o-Y Q-o-Q Y-o-Y 0.6% 1.0% 0.8% 0.2% 2020Q1 2020Q1 96.7 88.5 88.0 88.1 87.1 87.3 95.7 95.5 95.7 95.0 2021Q1 2021Q1 Business Park Warehouse Q-o-Q Y-o-Y Q-o-Q Y-o-Y 1.0% 1.1% 0.1% 0.5% 2020Q1 2020Q1 113.3 113.1 85.0 112.2 84.4 84.1 112.0 112.1 83.5 83.7 2021Q1 2021Q1 Rental Index (Private Industrial Space) PRICE Q-o-Q Y-o-Y Prices of industrial space also continued to rebound. In 1Q 2021, the price index of all industrial space rose by 0.9% on a quarter-on-quarter 1.3% basis, following a 1.0% quarter-on-quarter increase in the previous 0.9% quarter. However, the price index still fell by 1.3% on a year-on-year basis. Transaction volume of industrial properties, estimated based on caveats lodged for industrial properties, doubled year-on-year. This could be attributed to improving market sentiments. Price Index 2012Q4=100 120 100 89.3 88.3 86.4 87.3 88.1 80 60 2016Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021Q1 Number of Caveats Lodged 400 379 320 305 300 200 151 112 100 0 2018Q1 2019Q1 2020Q1 2021Q1 Multiple-User Factory Single-User Factory Q-o-Q Y-o-Y Q-o-Q Y-o-Y 1.7% 0.6% 0.9% 1.1% 2020Q1 2020Q1 92.6 91.2 91.0 79.7 89.2 90.2 79.2 79.2 77.7 78.3 2021Q1 2021Q1 Price Index INDUSTRIAL GOVERNMENT LAND SALES In 1Q 2021, the tender for one Industrial Government Land Sales (IGLS) site targeted for single-user- development at Jalan Papan closed. However, it was not awarded as the highest bid was below the reserve price. NOT AWARDED Plot 7, Jalan Papan • Land area of 0.88 ha • Received 2 bids • Highest bid $411 psm ppr An overview of the past successful tender prices for IGLS sites targeted at single-user developments is shown below. Successful Tender Price ($ psm ppr) 600 2019Q1 2019Q3 2019Q4 2020Q1 2020Q3 2020Q4 (3) (2) (4) 400 (1) (1) (1) (1) (1) 200 0 Jan Mar Aug Dec Feb Feb Jul Oct 2019 2019 2019 2019 2020 2020 2020 2020 Tuas Jalan Papan/Gul Circle Woodlands Note: 1) Figures are shown by tender closing month. Number in bracket refers to the number of bids. 2) There was no successful tender in 2Q 2019 , 2Q 2020 and 1Q 2021. ALLOCATION OF JTC’S READY-BUILT FACILITIES [RBF] In 1Q 2021, JTC allocated a total of 87,000 sqm of RBF space to industrialists, which included 61,000 sqm of high-rise space and 18,700 sqm of land-based factory space. Total RBF returns in 1Q 2021 was 53,700 sqm, of which 27,700 sqm was high-rise space and 19,300 sqm was land-based factory space. About 57% of the total returns were due to natural expiries or companies consolidating their operations. Gross Allocation Returns (‘000 sqm) (‘000 sqm) 110 106.3 110 100 100 90 87.0 90 80 80 70 70 59.5 60 60 55.7 53.7 51.9 50.0 50 50 44.3 38.8 40 40 38.1 30 30 20 20 10 10 0 0 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 Among the high-rise space that was allocated, about 57% was in JTC’s newer developments which include JTC Food Hub @ Senoko, trendspace, JTC Space @ Tampines North, JTC Space @ Tuas, JTC MedTech Hub @ MedTech Park, Surface Engineering Hub and LaunchPad @ one-north.
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