Industrial. Savills Research

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1 December 14, 21 "Robust economic growth, ample liquidity and low interest rates spurred buying activity in the quarter. Prices and rents registered the highest gains since their turnaround at the end of 29." Image: Midview City Singapore s economy grew by 1.6 per cent year on year, led by the manufacturing sector. Total transaction value for the fi rst nine months of 21 surpassed the value for the whole of 29 by 74 per cent. About 2.59 million sqft of factory space was completed in Q3, including Midview City at Sin Ming Lane and Jurong Food Hub. The factory space vacancy rate slipped marginally to 7.5 per cent as at end of Q3, while that of warehouse space inched up to 8.7 per cent. Prices and rents of overall industrial space rose 8 per cent and 5 per cent respectively in Q3/21, the highest growth recorded since the trough in Q3/29. Mapletree Trust launched its IPO to raise funds for the purchase of 7 properties in Singapore. Tenders for industrial sites received strong interest with the sites at Ubi Road 1 and Kaki Bukit Avenue 4 drawing 11 and nine bids respectively. Savills Research MICA(P) No. 141 / 11 / 28 Company Reg No D

2 Market Overview Singapore s economy expanded 1.6 per cent year-onyear in Q3 driven mainly by a 14.3 per cent growth in manufacturing output. Except for the volatile biomedical cluster, all manufacturing segments posted positive growth. In particular, precision engineering output shot up 45.3 per cent while the electronics segment saw a 28.4 per cent surge in output. As a result of robust economic performance, ample liquidity and low interest rates, activity in the industrial property market continued to gather pace. A total of 56 transactions were recorded in Q3/21, 37 per cent yearon-year increase which is on par with the decade s peak of 564 deals witnessed in Q3/27. Transaction values for the fi rst nine months of 21 reached S$3.26 billion, surpassing the S$1.87 billion recorded for the whole of 29. Rising rents in both offi ce and industrial sectors could have prompted smaller businesses to purchase their own premises. Due to their rental resilience and lower initial cost, industrial properties have also become an alternative investment choice. Sales Transactions & Values, 2 Q3/21 Q2 Q3 Q4 (LHS) Total Value of Transactions (RHS) 2, Number S$ million 4, 1,8 3,5 1, , 1,4 1, ,5 1, , , , The highest sales value in Q3 was recorded at Tradehub 21 with 6 units changing hands at an average price of S$311 per sqft. Limited supply of good-quality strata space in various areas has spurred buying activity, as seen in the 26 deals done in Vertex and the 24 deals achieved at AMK. Renewed confidence in the local stock market underpinned a buoyant investment market in the quarter. Previously shelved due to the global economic downturn, Mapletree Trust (MIT) launched its IPO, seeking to raise up to S$1.19 billion for a portfolio of 7 properties across Singapore with a total net lettable area of about 11.8 million sqft. Despite the slew of IPOs in the quarter, MIT s offering was almost 38 times oversubscribed, refl ecting a surge of liquidity in Asia. Existing REITs were also seen ramping up their portfolios in the quarter. AIMS AMP Capital REIT acquired C&P Logistics Hub for a whopping S$161 million while Cambridge Trust purchased 22 Chin Bee Drive and 1 & 2 Changi North Street 2 for about S$37.1 million. Mapletree Logistics Trust expanded its Singapore portfolio to 51 properties with the acquisition of AW Centre in Tuas for S$18.3 million. sites tendered in Q3 drew strong interest. In August, a 6-year leasehold industrial site at Ubi Road 1 received a total of 11 bids with Oxley Rising submitting the highest bid of S$169 per sqft per plot ratio (ppr). Another 6-year leasehold industrial site at Kaki Bukit Avenue 4 attracted nine bids in September. Wee Hur submitted the highest bid of S$95 per sq.ft ppr. Supply, Demand and Vacancy About 2.59 million sqft of factory space was completed in Q3. Among the major projects completed in the quarter were Midview City at Sin Ming Lane (1.26 million sqft) and Jurong Food Hub (298, sqft). Both projects are strata-titled for sale. We understand that take-up at both developments has been good with only a handful of units left unsold to date. Despite the infl ux of factory space, island-wide vacancy continued to slide from 7.6 per cent last quarter to 7.5 per cent at the end of Q3. Over 2 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. I 2

3 Supply, Take-up and Vacancy of Factory Space, 2 Q3/21 5, 4, Net Supply (LHS) Net Take-up (LHS) Vacancy Rate (RHS) ' sqft 14% 12% 1% Price and Rental Index, /2 Q3/21 Price Index Rental Index , 2, 1, 8% 6% 4% 2% , Q3 1 % -2% -4% Q3 1 The warehouse segment saw 267, sqft of space completed in Q3. Net demand, however, slipped 22, sqft in the quarter. Consequently, the warehouse space vacancy rate rose from 8.2 per cent in Q2 to 8.7 per cent in Q3. Supply, Take-up and Vacancy of Warehouse Space, 2 Q3/21 2, 1,5 1, , ' sqft Net Supply (LHS) Net Take-up (LHS) Vacancy Rate (RHS) Prices and Rents Q3 1 On the back of revived sales and leasing markets, the URA price and rental indices for overall industrial space rose 8 per cent and 5 per cent respectively in Q3/21, the highest gain recorded since the trough in Q3/29. The average monthly rents of Savills basket of prime flatted factories and warehouses strengthened to S$1.5 - S$1.8 per sqft in Q3. High-tech industrial rents held fi rm at S$3.2 to S$3.8 per sqft per month in Q3. 18% 16% 14% 12% 1% 8% 6% 4% 2% % Future Supply There is an estimated 33.4 million sqft of factory space and 7.51 million sqft of warehouse space set for completion between 21 and 214. The following are some notable projects in the pipeline: Property Location Gross Floor Area (sqft) Estimated Completion Biopolis Phase 3 Biopolis Road 435, 21 Solaris (Fusionopolis Phase 2B) CleanTech One UE BizHub East West Park BizCentral Woodlands Changi City Fusionopolis Phase 2A Ayer Rajah Avenue Nanyang Avenue / Cleantech Loop Changi Business Park Avenue 1 Tanjong Cling Road Woodlands Park E5 Changi Business Park Central 1 Fusionopolis Way / Ayer Rajah Avenue 47, , , 211 1,415, , , , 214 Over 2 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. I 3

4 Outlook Singapore s Purchasing Manager Index rebounded to 5.7 in October as global demand returned. Manufacturers, however, are taking a cautiously optimistic stance due to the ongoing concern over the Eurozone crisis as well as the appreciation of the Singapore dollar, which may affect their competitiveness. We expect rents and prices to hold fi rm in the fi nal quarter of 21. For further information, please contact: singapore Michael Ng Managing mng@savills.com.sg industrial, singapore Dominic Peters dpeters@savills.com.sg commercial, singapore June Chua investment sales, singapore Steven Ming sming@savills.com.sg research & consultancy, singapore Jessie Yeo Executive jyeo@savills.com.sg research & consultancy, asia pacific Simon Smith Senior address Savills (Singapore) Pte Ltd. 2 Shenton Way #17-1 SGX Centre 1 Singapore 6884 T: F: corporate website jchua@savills.com.sg ssmith@savills.com.hk This document is prepared by Savills for information only. Whilst reasonable care has been exercised in preparing this document, it is subject to change and these particulars do not constitute, nor constitute part of, an offer or contract; interested parties should not rely on the statements or representations of fact but must satisfy themselves by inspection or otherwise as to the accuracy. No person in the employment of the agent or the agent's principal has any authority to make any representations or warranties whatsoever in relation to these particulars and Savills cannot be held responsible for any liability whatsoever or for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document. This publication may not be reproduced in any form or in any manner, in part or as a whole without written permission of the publisher, Savills. Savills (Hong Kong) Limited. 21.

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