Manufacturing continued to drive Singapore’s recovery, with output expansions in electronics, precision engineering and chemical clusters outweighing output declines in the transport engineering, general manufacturing, and biomedical manufacturing clusters.
With the pandemic highlighting the importance domestic vaccine production, Singapore managed to attract two vaccine manufacturers to open vaccine production centres in the country. And as new reports indicate that the global chip shortage may be more protracted than previously anticipated, semiconductor manufacturers may be more sanguine in committing capital to expand production volumes, driving demand for industrial space.
However, the considerable supply of new industrial space in the pipeline would likely keep industrial rent growth in check. Although a significant proportion of the new supply consists of factory space, construction delays due to pandemic induced labour shortages and healthy pre-commitment levels for upcoming factory space may alleviate the impact on factory rentals, allowing rents to increase moderately between 1% and 3% for the whole of 2021.