JTC: Covid-19 – The reason behind fall in Industrial rent and prices

  • As per JTC Corp, the Industrial rents and prices will faced a slight downfall in Q1 2020 while the occupancy remained unaffected. Alas, the complete impact of the pandemic outbreak hasn’t been captured in the released data.
  • The fall in Industrial rent and prices will continue to go down further along with the delays in the completion of the outstanding projects as the pandemic virus continues to evolve in the time to come.
  • The price and Industrial rent index dropped by 0.4% and 0.1% on a quarter-on-quarter basis while the industrial space occupancy rate remained unaffected at 89.2% respectively.
  • On a year-on-year basis price index dropped by 0.7% and the occupancy rate dipped by 0.1% while the rental index remained unaffected.
  • The statistics released for quarter 1 only reflected the economic conditions for the period of Jan to March 2020 – the era when circuit breaker measures were not put in place. Many of the transactions that took place in April may have been in process and the verge of completion before the Covid-19 outbreak. The conditions may worsen in the coming quarters as the historical trends from the Global Financial Crisis in 2008 show that the impact of such events on the Industrial prices and rentals were only seen in the next quarters.
  • There will certainly be delays in the project completions as the construction work has been put on hold till June 1.
  • About 2.1 million square metres of industrial space were meant to be completed between Q2-Q4 which will now be delayed. From the total supplies 37% are for single-user factory space while 40% are for multi-user factory space respectively.
  • Based on the restrictions imposed on Industrial spaces the transaction volume in Q1 dropped by 29 percent as compared to the previous quarter and 38% on a year-on-year basis.

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