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manufacturers anticipates a more
favourable business situation in 1H
2010 as compared to 4Q 2009.
In the business and science parks
segment, demand is expected to
be supported by the growth of
the high value-added technologybased
manufacturing and R&D
industries. As announced in
Budget 2010, the government is
offering higher tax incentives for
R&D investments, to encourage
more companies to base their R&D
activities in Singapore. While rents
are expected to remain under
pressure in 1H 2010, due to the
rise in vacant stock following the
substantial 13.0 percentage points
decline in occupancy level in 4Q
2009, the fall is expected to bottom
in 2H 2010, barring any unforeseen
external shocks.
In addition to competition from
the business and science parks,
independent multi-user high-specs
industrial space may continue to
face competition from Grade B
office developments located at
the Fringe of CBD and Regional
Centres. Rents are hence expected
to remain weak in 2010. However, in
line with improved sentiment and
expectations of better take-up in
2010, rents for independent multiuser
high-specs industrial premises
are thus forecast to bottom out in
2H 2010.
For light industrial/conventional
factory space, the oversupply
situation is expected to ease on
the back of a reduction in net new
annual supply to about 292,000
sqm, from the 493,000 sqm seen
between 2003 and 2009. And
with more space expected to be
absorbed in 2010, on the back of
better economic and manufacturing
sector prospects, this would
support rents of light/conventional
multi-user factory space, which
could firm by up to 5% in 2010.
As for warehouse/logistics space,
demand is expected to be
boosted by the expected rise in
manufacturing production and
logistics activities in 2010. Coupled
with the slow down in net new supply
to only 74,000 sqm per annum from
2010 to 2014, rents could strengthen
by up to 5% in 2010.
Over the medium to long-term,
the government is committed
towards ensuring an ample supply
of industrial space to meet the
needs of the manufacturing and
logistics industries, through its
industrial land sales programme.
The recently introduced Land
Intensification Allowance (LIA)
scheme aimed at raising industrial
land productivity could yield more
efficient and interesting industrial
building designs and formats.
Older existing industrial buildings
could also be redeveloped to make
way for up-to-date building designs
and specifications, as Singapore’s
manufacturing industry moves up
the value-added chain.
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