Cushman & Wakefield’s Analysis of Q1 2019 JTC Statistics

Singapore, 25 April 2019 - On the whole, the overall industrial market appears to be stable with prices experiencing a marginal decline of 0.1%, and both rents and occupancies remaining flat.

However, the various industrial segments recorded a mixed performance. The performance of multiple-user factories remained mediocre, with rents inching down by 0.1% and the occupancy rate falling by 0.2%.

There were mixed signals in a couple of segments where rents fell but occupancies rose and vice versa. While rents for single-user factories fell by 0.6%, the occupancy rate rose by 0.3 percentage points. Conversely, warehouse rents inched up by 0.1%, but warehouse occupancy declined by 0.3 percentage points.

The only bright spot was business parks, which saw a rental increase of 0.9%, while occupancy rose by 0.7 percentage points. The completion of 5 Science Park Drive which was fully pre-committed by Shopee will further bolster the business park market.

Dark clouds are looming for the industrial sector. According to advance estimates from MTI, Singapore’s manufacturing GDP contracted by 1.9% y-o-y during 1Q2019. This represented the first quarterly y-o-y contraction since 1Q2016. On a q-o-q seasonally-adjusted basis, the contraction was more severe at 12.0%.

There was also turmoil in the logistics segment with CWT International’s creditors seizing control of Singapore-based CWT Pte Ltd after its parent company defaulted on interest payments for a HK$1.4 billion loan. While CWT International said that CWT Pte Ltd is still conducting normal business operations, it mentioned that creditors had already appointed receivers and managers to oversee the seized assets. It remains to be seen if creditors will divest or liquidate CWT Pte Ltd to recoup the outstanding loan amount, which may impact CWT Pte Ltd’s leases on multiple warehouses across the country.

For Further Information Contact:

Christine Li
Head of Research, Singapore, SEA

Geraldine Cheong
Associate Director, Communications Singapore, SEA

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