S'pore: Costliest Industrial Spot In Asia Ex-Japan

Source : The Business Times, March 13, 2008

It rises 2 notches to take 12th place in the world

SINGAPORE has risen two notches to become the 12th most expensive industrial location in the world.

And excluding Japan, which is ranked third in the world, Singapore is the most expensive location in Asia, surpassing Hong Kong (23rd), Mumbai (26th) and Taipei (36th).

Average net rents are now at $1.70 per square foot a month after rising 26 per cent year-on-year (y-o-y) last year. Total occupancy cost was US$14.64 psf a year at end-December 2007.

Singapore was also the eighth highest in terms of y-o-y rental increase as reflected in Cushman & Wakefield's (C&W) report, Industrial Space Across the World, which covers 138 global locations.

On industrial rents here, C&W (Singapore) managing director Donald Han said that demand rose across all segments including manufacturing, warehouses and business parks. The latter, in particular, gained from the spillover effects of the office space crunch in the CBD.

As a result, Singapore moved up two places to become the 12th most expensive industrial location in the world.

Mr Han believes the outlook for rental increases for industrial space here remains bullish.

He said: 'In the past 12 months, we saw the opening of the KPE and Terminal 3 besides other initiatives that are under construction such as the Circle Line MRT. All these will help to raise the attractiveness of industrial parks located in the peripheral areas and along with it, the rentals.'

London (near Heathrow) remained the most expensive industrial location with a total occupancy cost of US$28.91 psf a year followed by Dublin at US$21.81 psf. Oslo, with a total occupancy cost of US$18.32 psf took fourth place.

Despite European cities accounting for seven out of the top 10 locations in the global ranking, regional growth in Europe was slowest of all the global regions at just 2.5 per cent last year.

However, while Western Europe saw average rental growth of 1.3 per cent, Central and Eastern Europe increased by 7 per cent with the key locations being Poland, the Czech Republic and Romania.

In Asia, Mumbai moved up 11 places to 26th position. It also saw the highest rental increase of 94.44 per cent y-o-y followed by Istanbul (60 per cent) and Bogota (54.2 per cent).