However, JTC noted that this does not cover the full impact of the pandemic.

Prices of industrial properties fell 1.7% YoY in Q2, whilst its rents dipped 0.8% over the same period, according to JTC Corporation?s quarterly report. On a QoQ basis, prices and rents slipped 1.1% and 0.7%, respectively.

However, these does not yet cover the full impact of the pandemic as some deals were pre-committed before the Circuit Breaker measures and as there was a lack of recent market transactions, said JTC. The decline in prices and rents showed two quarters later during the 2008-09 global financial crisis.

Further, the occupancy rate of industrial spaces rose 0.2 percentage point (ppt) QoQ and 0.1 ppt YoY. There was a slight QoQ jump, thanks to the increase in occupancy for single-user factory and warehouse spaces. In the same period, the occupancy rates for multi-user factory and business park spaces fell.

?Business parks in the city fringe have always been actively sought after because of their central location and their specifications which mirror Grade A offices but at a fraction of the cost. It has always been a strategy for occupiers to consider business parks as a viable alternative for a secondary operating location,? commented Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield.

As for new supply, about 1.3 million sqm of new industrial space is expected to be completed in H2, which is a drop from the 2.1 million sqm reported in Q1. Only 0.2 sqm of space was completed in Q2, with JTC further projecting that there will be more delays for some industrial building projects as project owners and contractors adjust to meet BCA?s Safe Restart requirements.

Looking forward, the pandemic situation is likely to continue weighing on the industrial property market, putting downward pressures on prices and rents in the next few quarters.

?Whilst CBRE Research expects factory rents to be less resilient amid the unfavourable economic conditions, heightened demand for prime logistics spaces as well as the limited upcoming supply compounded by delays in project constructions could help to lend some support to overall warehouse rents,? said CBRE head of research for Southeast Asia Desmond Sim.