reporter2
03-04-14, 18:29
http://www.straitstimes.com/premium/money/story/industrial-rents-moderate-more-supply-20140402
Industrial rents 'to moderate with more supply'
Published on Apr 02, 2014
By Chia Yan Min
INDUSTRIAL rents are expected to continue moderating as more supply becomes available over the next three years, said the chief executive of industrial landlord JTC.
Mr Png Cheong Boon told a briefing yesterday: "We have seen that the price growth has slowed...but it will also depend on how well the economy does."
An additional 800,000 sq m of multi-user industrial space is expected to be available by 2017, he added.
Industrial rents rose 5 per cent last year, easing from increases of 10.1 per cent in 2012 and 15.5 per cent in 2011.
The cost of industrial space has been a hot topic of late, following the recent Budget debate when MPs spoke up on behalf of struggling small- and medium-sized enterprises (SMEs).
Real estate investment trusts (Reits), which now own land previously sold by government agencies, have been blamed for steep rental hikes.
The private sector has always been a major player in the industrial market, said Mr Png. Even before JTC sold some of its industrial space in 2008 and 2011, about 70 per cent of multi-user industrial sites were already owned by private sector developers. "It is not true that most SMEs were located in JTC facilities back then," he said.
The agency decided to sell off some of its industrial properties, given that the private sector was already supporting the bulk of SMEs' industrial requirements and "clearly there wasn't a market failure".
The private sector now owns about 85 per cent of multi-user industrial space - the type most commonly used by SMEs - while JTC owns about 3.5 per cent. The rest is owned by other government agencies such as HDB.
The divestments allowed the agency to focus on strategic industries, and developing properties that the private sector might not be able to provide, Mr Png added.
[email protected]
Industrial rents 'to moderate with more supply'
Published on Apr 02, 2014
By Chia Yan Min
INDUSTRIAL rents are expected to continue moderating as more supply becomes available over the next three years, said the chief executive of industrial landlord JTC.
Mr Png Cheong Boon told a briefing yesterday: "We have seen that the price growth has slowed...but it will also depend on how well the economy does."
An additional 800,000 sq m of multi-user industrial space is expected to be available by 2017, he added.
Industrial rents rose 5 per cent last year, easing from increases of 10.1 per cent in 2012 and 15.5 per cent in 2011.
The cost of industrial space has been a hot topic of late, following the recent Budget debate when MPs spoke up on behalf of struggling small- and medium-sized enterprises (SMEs).
Real estate investment trusts (Reits), which now own land previously sold by government agencies, have been blamed for steep rental hikes.
The private sector has always been a major player in the industrial market, said Mr Png. Even before JTC sold some of its industrial space in 2008 and 2011, about 70 per cent of multi-user industrial sites were already owned by private sector developers. "It is not true that most SMEs were located in JTC facilities back then," he said.
The agency decided to sell off some of its industrial properties, given that the private sector was already supporting the bulk of SMEs' industrial requirements and "clearly there wasn't a market failure".
The private sector now owns about 85 per cent of multi-user industrial space - the type most commonly used by SMEs - while JTC owns about 3.5 per cent. The rest is owned by other government agencies such as HDB.
The divestments allowed the agency to focus on strategic industries, and developing properties that the private sector might not be able to provide, Mr Png added.
[email protected]