Business park the only industrial segment in Singapore to improve occupancy in Q3

The vacancy rate eased by 0.1ppt to 14.8%.

Business park is the only segment in Singapore’s industrial property sector which saw a slight improvement in occupancy level in Q3. Savills says it is likely led by an increase in appetite for taking up business park space amid the tightening of office supply. 

Although one north and International Business Park (IBP) recorded higher vacancy level in Q3, the islandwide vacancy level for business park space eased by 0.1 of a ppt QoQ to 14.8% due to higher take-up in the Changi Business Park (CBP) and CleanTech Park locations. 

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Nonetheless, vacancy levels in areas such as Science Park, IBP and CBP remained under pressure due to locational factors that lead to weaker connectivity to main transport nodes. Moreover, business consulting firms, which formed the main bulk of the tenants in CBP, are largely downsizing their premises as their businesses were disrupted by remote working arrangements. 

As such, most landlords continued to keep their rents competitive to fill vacancies, resulting in a marginal increase of 0.2% QoQ in Savills’ standard business park properties monthly rents to S$4.04 per sq ft. Following four quarters of steady rental growth, Savills’ prime business park monthly rents started to stabilise at S$5.93 per sq ft in Q3. 

High-spec industrial rents continued to increase on the back of growing occupier demand as businesses look for prime office-like industrial spaces. According to Savills’ high-spec industrial basket, the average monthly rent for high-spec industrial properties rose at the same pace at 1.1% QoQ S$3.69 per sq ft in Q3, setting a record high since the series was constituted in 2012.