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10-01-14, 11:28
http://www.straitstimes.com/archive/tuesday/premium/money/story/industrial-property-sales-plunged-50-last-year-dtz-20140107
Industrial property sales plunged 50% last year: DTZ
Published on Jan 07, 2014
By Cheryl Ong
SALES of industrial property units tumbled last year in the wake of government moves to curb speculation.
Only 2,181 units were sold last year, down about 50 per cent from the 4,019 transactions in 2012, said property consultancy DTZ yesterday.
It also noted that sales in the October to December period plunged 43 per cent from the preceding quarter. "The total debt servicing ratio (TDSR) framework dampened buying activity in the industrial sector," DTZ said.
The seller's stamp duty, which ranges between 5 to 15 per cent depending on when the property is sold, also hit sales as speculative activity was weeded out.
Under the TDSR rules, a borrower's total debt obligations cannot exceed 60 per cent of his monthly income.
Sales of new industrial properties were the hardest hit, said DTZ, with only 709 units snapped up last year, 69 per cent below the 2,128 moved in 2012.
Weaker sales hit capital values. They rose only 0.8 per cent for prime first-storey units and 2.6 per cent for upper-storey units last year from 2012.
DTZ attributed the lacklustre sales figures to a limited supply of new units.
Smaller industrial sites in the Government Land Sales programme also meant that industrialists were unlikely to subdivide the property for sale, said Ms Lee Lay Keng, the consultancy's head of Singapore research.
But it was a different story on the rental front as leasing activity picked up on the back of a healthy manufacturing sector.
Average monthly gross rents for both prime first-storey and upper-storey industrial units climbed to $1.80 per sq ft in the three months to Dec 31, up 3 per cent from a year earlier, said DTZ.
An estimated 49.1 million sq ft of industrial space will be completed by 2017 - translating to an average annual supply of 11.6 million sq ft. This is lower than the 19.1 million sq ft expected to be completed this year, DTZ said, which might send rents up across the board this year.
Separately, a freehold industrial redevelopment site in Tai Seng went on sale by tender yesterday.
The indicative pricing for the 34,729 sq ft site is around $44 million to $46 million, said joint marketing agents Colliers International and Jones Lang LaSalle.
This works out to $506 to $529 per sq ft (psf) per plot ratio for the site at the junction of Kim Chuan Drive and Kim Chuan Lane.
The parcel is zoned for heavier industrial use and can be redeveloped into a multi-user factory or warehouse of around 49 strata units of about 1,500 sq ft each.
Colliers and Jones Lang LaSalle said the units could probably be sold at $1,000 psf or higher.
The tender closes on Feb 21.
[email protected]
Industrial property sales plunged 50% last year: DTZ
Published on Jan 07, 2014
By Cheryl Ong
SALES of industrial property units tumbled last year in the wake of government moves to curb speculation.
Only 2,181 units were sold last year, down about 50 per cent from the 4,019 transactions in 2012, said property consultancy DTZ yesterday.
It also noted that sales in the October to December period plunged 43 per cent from the preceding quarter. "The total debt servicing ratio (TDSR) framework dampened buying activity in the industrial sector," DTZ said.
The seller's stamp duty, which ranges between 5 to 15 per cent depending on when the property is sold, also hit sales as speculative activity was weeded out.
Under the TDSR rules, a borrower's total debt obligations cannot exceed 60 per cent of his monthly income.
Sales of new industrial properties were the hardest hit, said DTZ, with only 709 units snapped up last year, 69 per cent below the 2,128 moved in 2012.
Weaker sales hit capital values. They rose only 0.8 per cent for prime first-storey units and 2.6 per cent for upper-storey units last year from 2012.
DTZ attributed the lacklustre sales figures to a limited supply of new units.
Smaller industrial sites in the Government Land Sales programme also meant that industrialists were unlikely to subdivide the property for sale, said Ms Lee Lay Keng, the consultancy's head of Singapore research.
But it was a different story on the rental front as leasing activity picked up on the back of a healthy manufacturing sector.
Average monthly gross rents for both prime first-storey and upper-storey industrial units climbed to $1.80 per sq ft in the three months to Dec 31, up 3 per cent from a year earlier, said DTZ.
An estimated 49.1 million sq ft of industrial space will be completed by 2017 - translating to an average annual supply of 11.6 million sq ft. This is lower than the 19.1 million sq ft expected to be completed this year, DTZ said, which might send rents up across the board this year.
Separately, a freehold industrial redevelopment site in Tai Seng went on sale by tender yesterday.
The indicative pricing for the 34,729 sq ft site is around $44 million to $46 million, said joint marketing agents Colliers International and Jones Lang LaSalle.
This works out to $506 to $529 per sq ft (psf) per plot ratio for the site at the junction of Kim Chuan Drive and Kim Chuan Lane.
The parcel is zoned for heavier industrial use and can be redeveloped into a multi-user factory or warehouse of around 49 strata units of about 1,500 sq ft each.
Colliers and Jones Lang LaSalle said the units could probably be sold at $1,000 psf or higher.
The tender closes on Feb 21.
[email protected]