Industrial rents slip 0.7% QoQ in Q1

Tenants prioritising practicality has affected rates.

Rent rates for industrial buildings declined 0.7% quarter-on-quarter in 1Q24 as lessees put more weight on cost-effectiveness in their leasing decisions. 

Colliers said this tenant attitude led to several large-scale competitive leasing transactions, including 262,000 square feet (sq. ft.) in Goodman Westlink.

Meanwhile, warehouse rents were flat at a slight quarterly rise of 0.2%, it noted. 

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For 2024, Colliers said tenants want the most favourable terms, and landlords respond by offering attractive rates and packages. 

“Looking ahead, the tepid leasing market, discerning tenants, and potential for over 1 million sq. ft. of vacant space available in the coming quarters leads to our forecast of a notable rental drop of 5% in 2024,” it said.