Singapore industrial leasing volume reaches record highs in 2021

Total annual leasing volume increased 18.8% to 13,081 transactions during the year.

Singapore industrial leasing volume inched up 4.9% YoY to 3,055 transactions in Q4 2021. Savills says this brings total annual leasing volume to record level at 13,081, 18.8% higher than that in 2020. It was mainly lifted by strong leasing demand for single-user factory space which almost doubled from a year ago (+49.3%). 

According to Savills, this was largely driven by Small Medium Enterprises (SMEs) in the electronics, manufacturing, and pharmaceutical industries, which require larger facilities for their business operations. The multiple-user factory and warehouse segments also saw healthy takeup from digital and creative businesses, as well as ecommerce and third-party logistics (3PL) companies. 

Here’s more from Savills:

Compared with 2020 when leasing demand was largely driven by shorter leases to accommodate the surge in stockpiling, demand was more stable in 2021 as more industrialists committed to longer leases amid improving business sentiment. The vacancy rate for single-user factory and warehouse remained relatively stable in Q4, inching up by 0.1 of a percentage point (ppt) QoQ to 9.4% and 10.0% respectively. With removal of 178,900 sq ft of stock, the vacancy rate for multiple-user factories eased by 0.4 of a ppt QoQ to 9.8% in Q4. 

Rents continued to trend up across all industrial segments in Q4, with JTC’s rental index for factory and warehouse hitting a record since 2017. The Savills’ average monthly rent for prime multiple-user factories increased by 3.7% QoQ to S$1.84 per sq ft in Q4, which is 8.1% higher than a year ago. Savills’ average monthly rent for prime warehouse and logistics properties also rose at a faster pace by 1.2% QoQ to S$1.46 per sq ft in Q4.