Why Singapore’s business park vacancy remained high in Q3

The vacancy level in one region reached record highs since 2009.

Islandwide vacancy level for business parks in Singapore remained high at 19.5% in Q3, an inch up from the 19.4% in Q2, according to a report from Savills. Despite the improvement in vacancy rates in Mapletree Business City, Science Park and CleanTech Park, the islandwide vacancy level was affected by the poor take-up rate in the East Planning Region where the vacancy level went up to 27.0% (+0.7 of a ppt QoQ), the highest since 2009. 

“It was mainly attributed to ESR Bizpark @ Chai Chee where vacancy level rose by 1.2 ppt QoQ to 24.8%. Furthermore, the vacancy level in Changi Business Park also increased by 0.5 of a ppt QoQ to record high at 27.4% in Q3,” the report said.

Here’s more from Savills:

As a result of steady demand in the better-maintained prime business parks, Savills’ prime business park monthly rents held firm in Q3, edging up 0.1% QoQ to S$5.89 per sq ft. On the other hand, landlords of the standard business park properties might rather lower their rental expectations than to have vacant premises. This resulted in a 0.2% QoQ decline in the monthly rents of Savills’ standard business park properties to S$4.10 per sq ft. 

Underpinned by the growth of the high-value manufacturing industries, the demand for high-spec buildings remained strong. Newly revamped developments such as 7002 Ang Mo Kio Avenue 5 have been drawing interest before completion, securing about 50% occupancy nearing to completion. Nonetheless, rental growth has stalled as economic challenges have made occupiers cautious. According to Savills’ highspec industrial basket, the average monthly rent remained flat at S$3.83 per sq ft in Q3.