Rents in industrial market to slow by 4%

Due to increase in warehouse supply.

In terms of property in the industrial market, it has been noted that with 2015 closing out with a noticeable slowdown in export activities and retail sales, it has been no surprise that demand for warehouse space has tapered off significantly.

According to a release from Colliers International, further, with an increase in warehouse supply, rents will soften by 4%. Strata industrial prices are also expected to decline by up to 14% as the compressed yield gaps of the last few years in this section are slowly relaxed.

Here’s more from Colliers International:

“The halting of industrial revitalisation applications in March 2016 will contribute to a rising of potential industrial yields by up to 70 bps. This figure represents an increase of roughly 0.7% from 2.9% in 2015 to 3.6% in the coming year.

Such a rise is appreciably faster than for properties in the office sector,” Wayal Chiu, senior director, industrial services, said.