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Demand for food factories here remain healthy: Report

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With the rising popularity of food delivery services, demand for food factories in Singapore is expected to stay healthy, even though this will likely lag behind supply in 2019-2020, said Ms Tricia Song, head of research for Singapore at Colliers International.

Her comments on Wednesday accompany the research report tracking the performance of food factories in Singapore.

Colliers Research observed that delivery service providers had been solidifying their presence in the face of rising competition.

Foodpanda opened its first central kitchen in Woodlands Industrial Xchange last year, one month before Deliveroo launched its second central kitchen in CT Hub 2.

Also driving demand for food factories will be food and beverage operators looking to streamline their retail spaces, and the Government's push for greater productivity and innovation in Singapore's food industry, Ms Song noted.

"In addition, some owners of factories within or in close proximity to designated food zones are considering converting their properties into food factories," she said.

The research showed that demand for food factories nearer to the city centre continued to be strong, with mature food manufacturing areas such as MacPherson, Pandan Loop and Bedok North maintaining occupancy of between 80 per cent and 100 per cent.

In contrast, such properties in newer and farther locations including Tuas and Senoko have much lower occupancy rates of around 60 per cent.

Rents and prices of food factories will likely remain largely stable over the next three to five years, given the robust supply coming on-stream, Colliers said.

Some 3.68 million sq ft of food factory space - 9 per cent to 10 per cent of current food factory stock - is in the pipeline with more than 80 per cent of it scheduled to be completed this year and next year. - THE STRAITS TIMES