Singapore strata industrial sales drop 15.7% to 452 transactions in Q3

But prices still trended up during the quarter.

Following a short-lived uptick in Q2, a Savills report says strata industrial sales activity in Singapore fell 15.7% QoQ across all segments to 452 transactions. This could be partly attributed to the growing recession fears and rising cost of borrowing which weighed on investors’ sentiments. 

Strata warehouse sales fell marginally to 24 deals in Q3, compared with 34 in Q2. The sales volume for multiple-user factories declined from 497 in Q2 to 424 deals in Q3. However, the sales momentum for West Connect Building continued to hold up while other projects saw a muted sales take-up in Q3. 

Here’s more from Savills:

Industrial sales prices continued trending up in Q3, even though the overall price increase of properties with longer tenures halved from the previous quarter. Savills’ basket of industrial properties showed that prices for 60-year leasehold and freehold industrial properties rose by 1.2% QoQ to S$463 per sq ft and S$758 per sq ft respectively in Q3. Apart from the longer remaining tenure and nature of freehold leases, the rise in prices was driven by the strong price growth for food factory properties. 

On the other hand, Savills’ basket of industrial properties showed that 30-year leasehold property prices increased at a quicker pace of 0.9% QoQ to S$308 per sq ft in Q3. It could be led by stronger interest among some businesses which prefer properties of a lower quantum, and therefore these are of shorter lease tenures, to mitigate their risks amid rising economic uncertainty and elevated market volatility.