Industrial property transactions down sharply in Q3: DTZ

Demand for Singapore industrial space fell sharply during the third quarter amid a continued patchy performance by the manufacturing sector, real estate services firm DTZ said on Thursday (Oct 9).

Citing caveats from the Urban Redevelopment Authority’s REALIS, DTZ said sales of strata-titled industrial properties fell by about 36 per cent quarter-on-quarter during the July-September period to 203 transactions. The fall was even more significant compared to the 672 strata-titled units that were sold in the same period last year.

Besides the weakness in the manufacturing sector, the drop in transactions was also due to fewer new launches, and government cooling measures such as the imposition of a seller’s stamp duty.

DTZ said that while both average capital and rental values of conventional industrial space stagnated, business parks remained a bright spot with monthly gross rents rising by 2 per cent quarter-on-quarter to S$5 per square foot.

“There are more cases of qualifying office occupiers who are drawn by the lower business park rents relative to office rents. The difference in rents can be as high as 30 per cent compared to the average office rents in the decentralised areas,” said DTZ’s Executive Director of Business Space Cheng Siow Ying.

“Such occupiers can consist of start-up companies looking for lower start-up costs, or office tenants strategically relocating to take advantage of lower rents as well as information technology firms expanding their operations,” she added.

Source : Channel NewsAsia – 9 Oct 2014

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