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COMPANIES
22 industrial land sites up for grabs
Smaller parcels with shorter tenures will help cool market, say experts
Published on Jun 20, 2013
By Yasmine Yahya
ANOTHER bumper crop of industrial land sites will be released for sale in a move that should help put the brakes on runaway prices.
The increased supply comes in the form of 22 sites up for grabs under the Industrial Government Land Sales programme (IGLS) for July to December - a total area of 22.84ha.
Like much of the land released in the first half of this year, the new batch announced yesterday includes many small land parcels with shorter tenures.
There are 14 plots under 1ha in size and with leases of 21 years. The rest are between 1.17ha and 4.03ha with 30-year leases.
Analysts expect heavy bidding for many sites, including ones at Gambas Crescent, Tai Seng Street and Woodlands Industrial Park as well as those in Tuas, a perennial favourite among industrialists.
The large supply of smaller sites will help meet the demand from firms that prefer to build their own customised facilities, the Ministry of Trade and Industry (MTI) said yesterday.
Sites with shorter tenures will also be more affordable, it added.
R'ST Research director Ong Kah Seng said a continuous of supply of smaller sites will help cool the market as the shorter leases make property harder to flip, and thus deterring speculators.
SLP International research head Nicholas Mak noted there has been strong demand for such plots: "It is quite hard for companies to find sites between 0.3ha and 1ha with low plot ratio in Singapore. In the IGLS tenders for the past year, the number of bids for each small site ranged from seven to 19 bidders."
The Government has placed 19 of the new sites on the confirmed list so they go on sale regardless of interest.
Two new parcels have been added to the reserve list, at Tuas Bay Close and Gambas Crescent. These join an unsold plot at Woodlands Avenue 12 that will be carried over from the reserve list from the first half of the year.
Reserve list sites go on sale once a developer makes an acceptable initial offer.
The flood of new land sites on to the market cannot come quick enough for industrialists.
Prices of industrial property rose 4.5 per cent in January to March from the previous quarter despite cooling measures in January that included higher stamp duties, although experts see signs of a slowdown.
R'ST Research's Mr Ong noted: "Buyers' demand for industrial properties have moderated significantly since January's cooling measures... and it has sieved out speculators and discouraged some investors.
But while the prices of small sites are stable, those for larger plots on 30-year leases are still rising, said Soilbuild managing director Lim Chap Huat.
"We have bid on several sites that were released in the first half of the year and prices have gone from about $70 or $80 per sq ft in January to over $100 psf now."
Orange Tee's head of research and consultancy, Ms Christine Li, said demand for these larger sites will stay hot. "There is a unique site at Tai Seng Street launched for sale in the second half, which we believe will be keenly contested by developers," she said.
At just 1.17ha and with a 30-year lease, the plot will appeal to small or medium-sized developers with a longer investment horizon, she added. Meanwhile, two sites in Gambas Crescent, of 48ha and 1.57ha, could fetch a price of between $80 and $120 psf per plot ratio, she said.
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