Occupancy at ready-built JTC facilities dip

Net allocation remains in negative territory in Q3 2009 at negative 10,300 sq m against Q2’s negative 7,800 sq m

JTC Corp yesterday reported that the occupancy level at its ready-built facilities (RBF) fell slightly in Q3, by 0.3 percentage points to 97.1 per cent. In Q2, the occupancy level was stable at 97.4 per cent.

The industrial landlord also said in its quarterly facilities report that net allocation of its RBF remained in negative territory in Q3 2009 at negative 10,300 square metres, which was weaker than the negative 7,800 sq m recorded in the previous quarter.

On a year-on-year basis, the negative net allocation of RBF saw a steeper fall, from the negative 500 sq m recorded in Q3 2008. The decrease in net allocation came as termination rose by 3 per cent to 26,200 sq m from 25,600 sq m in Q2 2009. However, this is a slowdown from the 30 per cent rise in termination seen in Q2 over Q1.

The top three industry segments that contributed to the RBF termination in Q3 2009 were electronics (which accounted for 34 per cent of termination), chemicals (21 per cent) and precision engineering (21 per cent). A large proportion (some 33 per cent) of companies that terminated said that ‘consolidation of operations’ was their primary reason. But for JTC’s prepared industrial land (PIL), the net allocation bounced back into positive territory, achieving 14.7 hectares in Q3 2009 from negative 32.8 ha in the previous quarter.

JTC said that the swing into positive territory was caused mainly by a manufacturing-related company that took up 12 ha of land during the quarter.

Gross allocation in Q3 climbed to 25.7 ha, compared to 5.4 ha in Q2 2009. Termination registered a 71 per cent fall from the previous quarter to 11 ha in the third quarter. However, on a year-on-year basis, net allocation declined by 66 per cent from 43.5 ha in Q3 2008.

During the quarter, a larger proportion (83 per cent) of the gross allocation of PIL went to manufacturing related and supporting sector. The main segment contributing to the PIL termination was the construction industry, which accounted for 65 per cent of termination.

JTC also said that Fusionopolis phase 2A is currently under construction and is expected to be completed by 2014. The project will have a gross floor area of 103,630 sq m.

Source: Business Times, 14 Nov 2009