Demand for JTC industrial space mixed in Q2
Net take-up of its ready-built facilities turns negative while prepared industrial land demand rises
By EMILYN YAP
(SINGAPORE) JTC Corporation has turned in a mixed report card for the second quarter in terms of demand for its industrial properties.
Net take-up of its ready-built facilities fell into negative territory from the previous quarter, while take-up of its prepared land rose.
Net allocation of ready-built facilities was a negative 2,700 square metres in Q2, down from a positive 9,400 sq m in Q1.
Higher lease terminations were the culprit. Businesses returned 27,200 sq m of space - more than double the 12,700 sq m in the previous quarter.
The manufacturing sector accounted for 80 per cent or 21,800 sq m of the terminations in Q2.
Also, close to half of the terminations, involving 13,400 sq m of space, happened as companies consolidated their operations.
Standard factories bore the brunt of this, as 14,700 sq m of space in such properties was returned.
Larger gross take-up could not make up for the higher terminations. Gross allocation of ready-built facilities was 24,500 sq m in Q2, up 11 per cent from 22,100 sq m in Q1.
Despite the negative net take-up, the occupancy rate for ready-built facilities remained relatively steady at 97.4 per cent in Q2, dropping 0.1 of a percentage point from Q1.
At end-Q2, JTC had four ready-built facilities under development. Two at Seletar Aerospace Park and one at CleanTech Park are due to be completed next year, and Fusionopolis Phase 2A should be ready by Q2 2013.
Separately, JTC's prepared industrial land enjoyed a 5 per cent increase in net take-up, to 24.4 ha in Q2 from 23.2 ha in Q1.
A drop in terminations contributed to the improvement. Businesses returned 21.4 ha of land, down 43 per cent from 37.8 ha a quarter earlier.
Manufacturing-related and supporting industries contributed the bulk of terminations. Lower terminations boosted net take-up even as gross take-up fell. Gross allocation was 45.8 ha in Q2, slipping 25 per cent from 61 ha in Q1.
Jurong Island saw a surge in demand. Gross take-up there was 37.1 ha in Q2, more than two times the 16.2 ha in the previous quarter.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Consolidation: The manufacturing sector accounted for 80 per cent or 21,800 squaremetres of the terminations in the second quarter, with nearly half of this by companies consolidating their operations
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