Tuesday, April 26, 2011

High demand for industrial and office space in Q1

Straits Times: Tue, Apr 26
DEMAND for office and industrial properties was buoyant in the first three months of the year, new figures show.


Property experts said the strongly performing economy and low interest rates continued to drive keen investor interest in these two sectors.


Latest figures from the Urban Redevelopment Authority show prices of industrial properties rose 8.3 per cent over the preceding quarter's prices, while those of office properties rose 4.9 per cent.


Rents for both also gained strongly. Industrial rents were up 6.3 per cent, while office space rents rose 5.4 per cent.


Analysts said the strong interest in industrial space came as more companies set up new operations or expanded existing capacity in Singapore.


This was due to the healthy recovery in global trade and the strong rebound in Singapore's manufacturing sector in the first quarter of this year.


The industrial property market is likely to enjoy spin-offs from other segments such as retail.


Shop owners might see industrial space as an alternative for production or storage activities, said Mr Ong Kah Seng, senior manager for Asia-Pacific research at Cushman & Wakefield.


Analysts also expect Singapore's office property market to do well. Colliers International data showed that as of the end of last month, monthly gross rents of Grade A office space in the Raffles Place/New Downtown area posted further growth of 8 per cent compared with the previous quarter's figure, hitting $9.72 per sq ft.


CHERYL LIM

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