Thursday, January 26, 2012

Industrial properties run into headwinds

Business Times: Thu, Jan 26
(SINGAPORE) Singapore's industrial properties seem to be nearing the end of their strong run with growth in rents and capital values starting to taper off as worries over a supply glut grow.


Back in 2011, industrial rents and capital values produced a stellar report card, with the URA (Urban Redevelopment Authority) reporting a 16 per cent to 22 per cent jump in multi-user and warehouse price and rental indices, respectively, as rents and prices reached multi-year highs.


However, going into the Dragon Year, consultants and analysts predict softer or flat rental growth for factories, warehouses, high-specifications industrial buildings and business park properties due to oncoming supply pressure.


In fact, there is a net floor area of 9.59 million square feet (sq ft) of industrial space in the pipeline for 2012, with around 66 per cent expected to be factory space, said Colliers International Singapore Research.


The large supply of factory space, in particular, is expected to depress rents at facilities island-wide after a steady climb to recent highs on the back of robust manufacturing growth...

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