Warehouse rent here exits global top 10

Colliers expects most Asia-Pacific warehouse markets to firm up in H2

PRIME warehouse rents slipped in the first half of the year to push Singapore out of the 10 most expensive prime warehouse markets in the world.

According to a Colliers International study, Singapore is now No 14, six rungs down from No 8 in a previous ranking covering the second half of 2008.

Prime warehouses here offering space of 20,000 square feet or more fetched an average rent of US$12.38 per square foot per year in first-half 2009.

Tokyo retained top spot with an average prime warehouse rent of US$22.18 psf per year – 79 per cent higher than in Singapore.

London Heathrow remained second with an average prime warehouse rent of US$20.64 psf per year.

Across the Asia-Pacific, Singapore is the fourth most expensive place to rent prime warehouse space – down one notch from the second half of 2008.

Tokyo, Hong Kong and Seoul occupied the top three spots.

As for bulk warehouses with space of 100,000 sq ft or more, Singapore is in 13th position, with rents averaging US$9.90 psf per year.

It edged up one spot from six months earlier.

Industrial rents fell in almost all markets in the first half of 2009 because of the economic downturn, Colliers said.

But it believes that the decline is likely to moderate.

‘With the global economy showing signs of life and global trade on the upswing, most of the warehouse markets in Asia-Pacific are expected to firm up in the second half of 2009,’ it said.

The slide in industrial rents in Singapore slowed in the third quarter this year.

‘Improving confidence in the economy and the better-than-expected performance of the manufacturing sector have facilitated a moderate rental fall and stabilised capital values,’ said Colliers research and advisory director Tay Huey Ying.

For instance, the average capital values of prime freehold upper floor factory and warehouse space rose 1.1 per cent and 1.8 per cent to $376 and $344 psf respectively at the end of the third quarter.

And sales transaction volumes involving strata industrial space grew by more than 50 per cent from the second quarter to the third quarter.

The volume even surpassed that in the third quarter 2008 before Lehman Brothers collapsed.

Source: Business Times, 9 Oct 2009