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01-10-13, 16:53
http://www.businesstimes.com.sg/specials/property/big-drop-strata-factory-sales-date-20131001
Published October 01, 2013
Big drop in strata factory sales to-date
By ong chor hao [email protected]
[SINGAPORE] The number of strata-titled factory sales to date this year is just over half the number seen over the same period last year, a DTZ report showed, as government regulations and a Total Debt Servicing Ratio (TDSR) framework took effect.
In its quarterly report on industrial property released yesterday, DTZ said that 1,553 strata factory units changed hands this year as at Sept 27, down 46 per cent from the 2,890 in the previous year.
"The fall in transactions suggests that speculative buying in the industrial sector has dimmed over the course of the year," said Lee Lay Keng, head of Singapore research at DTZ.
Investment demand for industrial properties has also calmed following the TDSR's implementation, with the process of obtaining property loans now "more onerous and lengthy".
A series of government measures, from a Seller Stamp Duty on industrial property introduced in January, to others such as releasing smaller sites with shorter leases and mandating the minimum size of industrial units, also took their toll.
Based on caveats data from the Urban Redevelopment Authority (URA), DTZ said that 353 resale transactions for strata-titled factories were recorded in Q3, nearly 50 per cent lower than the previous quarter.
The subdued industrial property activity in Q3 corresponded with industrial rents and capital values both staying flat over the previous quarter. DTZ's research showed that average gross rents for first and upper-storey conventional industrial space stayed at $2.15 per square foot per month (psf pm) and $1.75 psf pm respectively.
For hi-tech and business park developments, rents remained at $3.10 psf pm and $4.70 psf pm.
As for capital values, average resale prices for first-storey and upper-storey freehold conventional industrial space in Q3 were unchanged from the previous quarter, at $627 psf and $470 psf respectively.
Ms Lee said that the various government measures mean industrial property prices should "stabilise going forward", which will benefit genuine end-users who want to buy their own property to avoid rental fluctuations.
Many industrialists tend to prefer larger, single-user facilities that are more flexible for production layout, DTZ said. URA data shows that the net supply of single-user factories in the first half of 2013, at 4.3 million sq ft, is already 23 per cent higher than the entire supply last year.
There is also a trend of tie-ups between specialised firms and property players for purpose-built industrial space, DTZ said.
But the bulk of private industrial space to be completed next year will be warehouses and multiple-user factories, with a large proportion being strata-titled developments.
Between the second half of this year and 2014, some 64 per cent of a huge pipeline of 46 million sq ft of private industrial space expected to be ready by 2016 will come on stream.
Published October 01, 2013
Big drop in strata factory sales to-date
By ong chor hao [email protected]
[SINGAPORE] The number of strata-titled factory sales to date this year is just over half the number seen over the same period last year, a DTZ report showed, as government regulations and a Total Debt Servicing Ratio (TDSR) framework took effect.
In its quarterly report on industrial property released yesterday, DTZ said that 1,553 strata factory units changed hands this year as at Sept 27, down 46 per cent from the 2,890 in the previous year.
"The fall in transactions suggests that speculative buying in the industrial sector has dimmed over the course of the year," said Lee Lay Keng, head of Singapore research at DTZ.
Investment demand for industrial properties has also calmed following the TDSR's implementation, with the process of obtaining property loans now "more onerous and lengthy".
A series of government measures, from a Seller Stamp Duty on industrial property introduced in January, to others such as releasing smaller sites with shorter leases and mandating the minimum size of industrial units, also took their toll.
Based on caveats data from the Urban Redevelopment Authority (URA), DTZ said that 353 resale transactions for strata-titled factories were recorded in Q3, nearly 50 per cent lower than the previous quarter.
The subdued industrial property activity in Q3 corresponded with industrial rents and capital values both staying flat over the previous quarter. DTZ's research showed that average gross rents for first and upper-storey conventional industrial space stayed at $2.15 per square foot per month (psf pm) and $1.75 psf pm respectively.
For hi-tech and business park developments, rents remained at $3.10 psf pm and $4.70 psf pm.
As for capital values, average resale prices for first-storey and upper-storey freehold conventional industrial space in Q3 were unchanged from the previous quarter, at $627 psf and $470 psf respectively.
Ms Lee said that the various government measures mean industrial property prices should "stabilise going forward", which will benefit genuine end-users who want to buy their own property to avoid rental fluctuations.
Many industrialists tend to prefer larger, single-user facilities that are more flexible for production layout, DTZ said. URA data shows that the net supply of single-user factories in the first half of 2013, at 4.3 million sq ft, is already 23 per cent higher than the entire supply last year.
There is also a trend of tie-ups between specialised firms and property players for purpose-built industrial space, DTZ said.
But the bulk of private industrial space to be completed next year will be warehouses and multiple-user factories, with a large proportion being strata-titled developments.
Between the second half of this year and 2014, some 64 per cent of a huge pipeline of 46 million sq ft of private industrial space expected to be ready by 2016 will come on stream.