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12-07-12, 01:52
http://www.businesstimes.com.sg/archive/wednesday/premium/singapore/industrial-space-prices-rise-further-dtz
Published July 04, 2012
Industrial space prices to rise further: DTZ
By Mindy Tan
THE trend of capital values of industrial space rising even as rents soften, as seen in Q2, is likely to continue for the rest of the year, according to DTZ, part of UGL Services.
In particular, rents of hi-tech industrial space is expected to fall more than that for conventional industrial space.
Business park and high-tech industrial space saw rents soften in Q2, even as it held firm for conventional industrial space.
Average business park and high-tech rents dipped 0.7 per cent quarter on quarter to $4.35 per square foot (psf) per month and $2.98 psf per month respectively.
Conventional industrial space rents on the upper storeys were unchanged, at $1.75 psf per month.
In contrast, capital values rose, in part driven by cooling measures in the residential property market which drove investors to the industrial sector, and in part due to benchmark prices set in new project launches.
Said DTZ: "Some new launches are priced at close to, or exceeding the $1,000 psf mark, higher than some residential properties."
In the secondary market, prices for first-storey industrial space increased 4 per cent quarter on quarter to $577 psf while upper-storey prices rose 4.9 per cent quarter on quarter to $430 psf.
Chua Chor Hoon, DTZ's Head of Asia Pacific Research, noted: "As a result of prices rising faster than rents, yields are being compressed. Nevertheless, we expect to see further price increases, as the shorter tenure and 10-year restriction in sale of strata-titled units for new sites sold in the Government Land Sales programme will funnel more demand to resale and new industrial properties that are not affected by the restrictions."
Rental values on the other hand are forecast to fall for the rest of the year, given the slowdown in economic growth, translating to compressed yields.
Cheng Siow Ying, DTZ's executive director, business space, said: "Given that most of the pipeline supply of multiple-user factories will be high-tech in specification, and that the authorities are stepping up enforcement activity on unauthorised uses which include non-qualifying office users who can afford to pay higher rents than conventional industrialists, we expect rents of hi-tech industrial space to fall more than that for conventional industrial space."
Published July 04, 2012
Industrial space prices to rise further: DTZ
By Mindy Tan
THE trend of capital values of industrial space rising even as rents soften, as seen in Q2, is likely to continue for the rest of the year, according to DTZ, part of UGL Services.
In particular, rents of hi-tech industrial space is expected to fall more than that for conventional industrial space.
Business park and high-tech industrial space saw rents soften in Q2, even as it held firm for conventional industrial space.
Average business park and high-tech rents dipped 0.7 per cent quarter on quarter to $4.35 per square foot (psf) per month and $2.98 psf per month respectively.
Conventional industrial space rents on the upper storeys were unchanged, at $1.75 psf per month.
In contrast, capital values rose, in part driven by cooling measures in the residential property market which drove investors to the industrial sector, and in part due to benchmark prices set in new project launches.
Said DTZ: "Some new launches are priced at close to, or exceeding the $1,000 psf mark, higher than some residential properties."
In the secondary market, prices for first-storey industrial space increased 4 per cent quarter on quarter to $577 psf while upper-storey prices rose 4.9 per cent quarter on quarter to $430 psf.
Chua Chor Hoon, DTZ's Head of Asia Pacific Research, noted: "As a result of prices rising faster than rents, yields are being compressed. Nevertheless, we expect to see further price increases, as the shorter tenure and 10-year restriction in sale of strata-titled units for new sites sold in the Government Land Sales programme will funnel more demand to resale and new industrial properties that are not affected by the restrictions."
Rental values on the other hand are forecast to fall for the rest of the year, given the slowdown in economic growth, translating to compressed yields.
Cheng Siow Ying, DTZ's executive director, business space, said: "Given that most of the pipeline supply of multiple-user factories will be high-tech in specification, and that the authorities are stepping up enforcement activity on unauthorised uses which include non-qualifying office users who can afford to pay higher rents than conventional industrialists, we expect rents of hi-tech industrial space to fall more than that for conventional industrial space."