Warehouse rents up nearly 5% in first quarter

Warehouse rents rose almost 5 per cent in the first quarter of this year - the first increase since Q2 2003.

According to a report by CB Richard Ellis (CBRE), average monthly rent for warehouses improved by 4 to 4.8 per cent in Q1. It edged up to $1.30 per sq ft for ground-floor units and $1.10 psf for upper floor units.

Previously, these rents had been stagnant at $1.25 psf and $1.05 psf.

CBRE director of industrial and logistics services Bernard Goh said yesterday: ‘More logistics companies are setting up distribution centres in Singapore, given its proximity to the growing economies of China and India and its good air and sea connections with Asia and the rest of the world.’

Dubai-based shipping and logistics company CargoGulf set up its global headquarters here recently, Mr Goh noted. And Computer firm Dell had said that it would move its global supply chain management manufacturing operations to Singapore.

Average rent for high-tech space also rose in Q1 this year - by 5 per cent to $2.10 psf from $2 in the previous quarter. Year on year, high-tech rent increased 13.5 per cent.

Mr Goh attributes this to demand from companies looking to high-tech space as an alternative to traditional office space, which is in short supply.

Some companies are also opting for high-tech and business/science park space for back-up recovery offices.

The average monthly rent for factory space rose five cents psf in Q1 this year to $1.30 psf for ground floors and and $1.05 psf for upper floors.

Ascendas Reit was the most active Reit in Q1. It bought $81.7 million of properties including 27 International Business Park for $18.6 million. Cambridge Industrial Trust bought 55 Ubi Avenue 3 for $18.8 million. Mapletree Logistics Trust did not buy any properties in Singapore.

Source: The Business Times, 05 April 2007