2019-10-23_DTZ戴德梁行_SINGAPORE_INDUSTRIAL-JUNE_2019_MARKETBEATS_2页_340kb

Singapore Industrial Market Summary – June 2019

Core Content Overview

This document provides an analysis of the Singapore industrial market as of June 2019, highlighting key economic indicators, rental trends, and new investment developments. It also outlines the current outlook for the sector, emphasizing the challenges and opportunities in the context of a subdued economic environment.

Economic Performance

• Overall Economic Growth: Singapore's overall economy grew at a slow pace of 1.2% year-on-year (y-o-y) in the first quarter of 2019.
• Manufacturing Sector: The manufacturing sector contracted by 0.5% y-o-y, marking the first contraction in almost three years.
• PMI Data: The May manufacturing Purchasing Managers' Index (PMI) dropped by 0.4 to 49.9, indicating a contractionary trend.

Industrial Rent Trends

• Business Park (City Fringe): Effective rent is S$5.99 per square foot per month (SF/MO), with a quarterly-on-quarter (Q-O-Q) change of -0.3%.
• Business Park (Outlying Areas): Effective rent is S$4.00 per SF/MO, with a Q-O-Q change of 0.0%.
• Science Park: Effective rent is S$4.32 per SF/MO, with a Q-O-Q change of 0.0%.
• High-Tech: Effective rent is S$2.76 per SF/MO, with a Q-O-Q change of 0.0% and a downward trend expected in the 12-month outlook.
• Factory: Effective rent is S$1.76 per SF/MO, with a Q-O-Q change of -0.6% and a downward trend expected.
• Warehouse: Effective rent is S$1.80 per SF/MO, with a Q-O-Q change of 0.0% and a downward trend expected.

New Investments and Projects

Despite the economic slowdown, several global firms have continued to invest in Singapore's industrial sector:

• Corteva Agriscience: Opened its Asia-Pacific headquarters at Biopolis, focusing on R&D for sustainable crop yield enhancement.
• PerkinElmer: Launched its life science lab at JTC MedTech Hub to produce detection and analytical instruments.
• Thyssenkrupp: Planned to establish a Singapore Manufacturing TechCenter Hub later in 2019 to explore 3D printing solutions across industries.

Significant Business Park Projects

Several major projects are either planned or under construction in key industrial submarkets:

• CleanTech Loop: Located in CleanTech Park, 572,000 SF, expected to be completed in 2020.
• 13 International Business Park: Located in International Business Park, 156,000 SF, to be completed in 2020 with TÜV SÜD as a major tenant.
• Wilmar International BTS: Located in one-north, 153,000 SF, to be completed in 2020 with Wilmar International as a major tenant.
• Razer HQ: Located in one-north, 177,000 SF, to be completed in 2020.
• Grab HQ: Located in one-north, 387,000 SF, to be completed in 2020.
• Surbana Jurong Campus: Located in CleanTech Park, 631,000 SF, expected to be completed in 2021.

Outlook and Challenges

• Economic Concerns: The industrial sector faces potential challenges due to the escalation of the US-China trade war and concerns over an impending US recession.
• Recession Risk: Economists warn that Singapore may slip into recession in 2020 if macroeconomic conditions continue to deteriorate.
• Industrial Rents: Industrial rents are expected to remain flat for the second half of 2019 and moderate in 2020.

Currency Conversion

• US$/S$: 1.356
• €/S$: 1.530 (as of 20 June 2019)

Key Contacts

• Christine Li
  Head of Research, Singapore & South-east Asia
  3 Church Street, 09-03 Samsung Hub, Singapore 049483
  Tel: +656232 0815
  Email: christineli.mw@cushwake.com