Singapore's industrial property market still going strong

Sep 12, 2011 - CommercialGuru.com.sg

 

Buying activity in the industrial property market has remained strong, with the total transaction value in the first half of this year at S$2.3 billion, reflecting a 14 percent year-on-year growth, according to the latest Industrial Briefings Q2 2011 by Savills.

Nearly S$1.1 billion worth of industrial properties changed hands in the second quarter of 2011, up 42 percent over the same period last year.

According to a report by Singapore Business Review, the recent trend of developers launching smaller units has fuelled affordability. Brisk sales were recorded during the preview of Soil Build Group’s North Spring Bizhub, which has an average price of around S$478,000 for a 1,539 sq ft unit.

Meanwhile, industrial companies have continued their acquisition trail in the first half, although most of the transactions were made during the first quarter. Six properties worth S$301.9 million were acquired in the first quarter, including the S$125.6 million purchase of Neuros and Immunos in Biopolis by Ascendas Reit.

Approximately 2.1 million sq ft of factory space was completed in the second quarter, said the report. Majority of the space was single-user factories, including JTC’s Business Aviation Complex and Rolls-Royce facilities, both located at Seletar Aerospace Park (SAP). The second quarter also witnessed the completion of the 352,000 sq ft Woodlands Bizhub.

In the warehouse segment, around 2.1 million sq ft of space has entered the market in Q2, with the 806,000 sq ft CWT Logistics Hub 3 at Tanjong Penjuru the most notable completion. Its strategic location, within proximity of Jurong Island and Jurong Port, makes the property an ideal logistics facility.

In addition, the Urban Redevelopment Authority (URA) price index for all industrial properties climbed six percent in Q2, after increasing eight percent in the first quarter. The average monthly rents of prime flatted warehouses and factories tracked by Savills increased between S$1.7 psf and S$2.1 psf, while high-tech industrial rents grew to between S$3.6 psf and S$4.0 psf.

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