JCUBE in Jurong East, Singapore set to close in August to make way for a 40-storey residential JCube Residence and commercial development JCube Condo Residence. Estimated S$2,000-2,100psf, slated for completion in 2027. 25,000sq m of commercial space, 1,760 residential units and more in the area.

Ongoing supply exceeding demand in the industrial property market led to an overall occupancy rate decline in 1Q2023, according to the latest quarterly market report by JTC. The rate dropped to 88.8%, a decrease of 0.6 percentage points compared to the previous quarter, and 1.0 percentage points compared to the same period a year ago.

Amid inflationary pressures, however, prices and rentals continued to rise. The overall price of industrial space increased by 1.5% from the previous quarter and 6.9% from the same period a year ago. Industrial rents grew 2.8% q-o-q in 1Q2023 and 8.8% y-o-y. New and diverse manufacturing activities are behind this growth, such as Hyundai Motor Group’s Innovation Centre that started operations at Jurong in April 2023 with the production of electric vehicles.

Warehouse space saw strong quarterly growth of 2.9% in rent in 1Q2023, likely due to a persistent supply crunch in this sector, while multiple-user and single-user factory rental indices each increased by 3.0% q-o-q.

In light of a tempered manufacturing outlook, rental growth is expected to slow, especially for high-specification factory space. Business park space has experienced slower growth in comparison, seeing a 0.6% q-o-q increase. Demand for this segment is expected to weaken with higher supply coming onstream this quarter.

Landlords with newer and quality assets are expected to stay ahead of the market uncertainty, outlasting those with older developments. Further rental increases in the near term can be expected for prime logistics spaces, but landlords of older buildings may need to embark on asset enhancement initiatives, redevelopment works, and incentives to retain tenants.