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Thread: Industrial land prices and rents still competitive

  1. #1
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    Default Industrial land prices and rents still competitive

    http://www.straitstimes.com/archive/...itive-20121117

    Industrial land prices and rents still competitive

    This is despite rising land costs for businesses: Lim Hng Kiang

    Published on Nov 17, 2012

    By Robin Chan Political Correspondent


    DESPITE rising land costs for businesses, Singapore's industrial land prices and rents continue to be competitive against those of neighbouring countries, said Minister for Trade and Industry Lim Hng Kiang yesterday.

    In fact, land rent, which affects most small and medium-sized enterprises (SMEs), stayed flat from 2002 to 2007, after which it has risen by about 30 per cent, he added.

    Industrial land prices, however, have gone up very sharply, he said. The price of industrial land has increased by 60 per cent since the start of last year.

    Still, after tracking "our competitiveness very closely in terms of our land prices and land rentals vis-a-vis alternatives... we continue to feel that our land prices and rentals are competitive", he told Parliament.

    Mr Lim was replying to Mr Inderjit Singh (Ang Mo Kio GRC), who had asked how the Government could keep industrial land affordable, and whether investors speculating in the market were driving up the land prices.

    Mr Singh, a businessman and a member of the Finance and Trade and Industry Government Parliamentary Committees, rose five times to press the minister on the issue.

    Business associations and economists have called for measures to ease rising land costs for businesses, which are already suffering a manpower squeeze following the tightening of the foreign labour tap.

    Some observers have suggested that foreign investors, reined in repeatedly by the Government's cooling measures in the residential property market, could be pouring money into commercial and industrial property and driving up prices.

    Others have blamed the sale of some land by industrial landlord JTC to private developers, who want to maximise returns on their real estate investment trusts (Reits).

    But Mr Lim noted that of the 60 per cent of industrial land that is rented out, 27 per cent is owned by "big Reits or big developers", which is where foreign investors might be classified, and "is not a very big percentage".

    He said the Government does not track whether investors who buy industrial land are foreign or local, but it is monitoring the situation and would "have to start collecting data".

    He also said the Government will not consider re-owning JTC land, as it made up just 20 per cent of all industrial land.

    Previously, "JTC tenants have a very unfair advantage in that they're getting subsidised rent from JTC and it's not a level playing field", he said. "So... we have decided to get out and it took us several years to stage the divestment such that it has minimal impact on the sector."

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    Default Foreign investors not impacting industrial rents much: Hng Kiang

    http://www.businesstimes.com.sg/arch...kiang-20121117

    Published November 17, 2012

    YESTERDAY IN PARLIAMENT

    Foreign investors not impacting industrial rents much: Hng Kiang

    By Lynn Kan


    FOREIGN investors in Singapore's industrial property probably do not exert a significant impact on the rentals of factory space here, Minister for Trade and Industry Lim Hng Kiang said yesterday.

    He said that while Singapore does not collect data on whether owners of industrial space are foreigners, foreign buyers of industrial properties are most likely either large private developers or real estate investment trusts, and such entities own about 27 per cent of the industrial space here.

    Foreign investors thus "do not form a very large percentage".

    Mr Lim was responding to a question from MP Inderjit Singh (Ang Mo Kio GRC) on whether foreign buyers have driven up industrial land prices here.

    The minister noted that industrial land prices had risen more sharply in the last three years than land rentals, which affects the performance of small- and medium-sized enterprises.

    Industrial property rentals had been flat between 2002 and 2007, and rose only thereafter.

    Mr Lim ruled out the possibility of the government restricting the purchase of industrial properties to users of the space, as this would have significant impact on businesses.

    "Allowing investors to participate in the industrial property market provides options for industrialists, reduces the upfront capital costs for businesses and keeps rentals competitive."

    He added that not all industrialists buy industrial space; some prefer to rent, an arrangement which gives them more business flexibility.

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