Prime logistics properties show strong rental growth in 1Q2022: Cushman & Wakefield
Prime logistics rents continued to show strong rental growth in 1Q2022, registering a 3% increase q-o-q, according to a report by Cushman & Wakefield.
This comes amid steady rental growth across the industrial market. Apart from prime logistics properties which topped the list in terms of rental growth, most industrial segments, including high-tech properties, factories and city-fringe business parks, saw an increase in 1Q2022 rental rates amid tight vacancy rates.
In contrast, business parks in outlying areas saw a dip in rents as vacancy remained high.
Cushman & Wakefield expects broadbased rental growth across multiple industrial segments this year. In particular, rents for city-fringe and outlying business park properties are projected to increase, with the former expected to experience higher growth due to limited supply.
Overall factory rents are expected to rise gradually in 2022, underpinned by healthy demand from expansion in the manufacturing and logistics sectors despite considerable supply completions by the end of the year.
For the prime logistics segment, Cushman & Wakefield predicts an accelerated rental growth through 2022, as third-party logistics players and end-users drive up demand to meet a growing consumer appetite. In addition, future supply remains limited with only a few major projects in the pipeline such as 2PS1, Logos Tuas Logistics Hub and Logos Penjuru Logistics Centre.
“Continued healthy demand is expected for high-tech, prime logistics and warehouse properties amid ongoing expansion from the biomedical, technology, manufacturing and logistics sectors, fuelled by the exponential growth in e-commerce and business digitalisation,” says Wong Xian Yang, head of research, Singapore, at Cushman & Wakefield.