Lacklustre manufacturing sector prompts slower industrial sales activity in 3Q2023

Singapore industrial sales activity slowed in 3Q2023 due to a lacklustre manufacturing sector. According to October research by Knight Frank, the third quarter registered 381 industrial sales transactions with a total deal value of $922.7 million – a 16.4% q-o-q fall in the number of deals and a 13.9% q-o-q fall in deal value.

In August, the Ministry of Trade and Industry (MTI) narrowed its forecast for Singapore’s economic growth in 2023 to a range of 0.5% and 1.5%, down from its previous range of 0.5% to 2.5%. This, along with the 5% y-o-y contraction in the manufacturing sector seen in advance estimates released by MTI in October, has had a significant impact on the industrial real estate sector.

Leasing volume for multiple-users factories islandwide fell 2.4% q-o-q to 2,461 tenancies in 3Q2023. However, median rent for multiple-user factories islandwide climbed 3.7% q-o-q to $2.17 psf pm.

Marina Gardens Lane Condo offers more than just convenience in terms of its proximity to several educational institutions in the Marina Bay and Central Business Districts. Established educational institutions such as Raffles Girls’ Primary School, Anglo-Chinese School (Junior) and Nanyang Academy of Fine Arts are all conveniently close by.

Despite the waning activity in the sector, the manufacturing industry appears to be showing signs of bottoming out. On a q-o-q basis, the manufacturing sector reversed from a 1.5% decline in 2Q2023 to edge up 0.2% in the last quarter.

The 3Q2023 Business Expectations Survey carried out by the Singapore Department of Statistics showed positive sentiment for the manufacturing sector in the period from July to December 2023. In light of this, Knight Frank Singapore Director of Occupier Strategy and Solutions, Norishikin Khalik believes there is potential for a recovery in the industry.

Ultimately, Singapore continues to showcase strong potential for manufacturing clusters. The Economic Development Board reported that Singapore was awarded $1.6 billion in fixed asset investment commitments in 2Q2023, with various sectors such as biomedical manufacturing and transport engineering receiving more forward-looking investment commitments. Such developments demonstrate Singapore’s continued appeal among international industrialists.