Sunday, November 18, 2012

Govt to release sufficient land to moderate industrial property prices, rentals


SINGAPORE: Sufficient land will be released through the Industrial Government Land Sales Programme to moderate prices and rentals of industrial properties.

Minister for Trade and Industry Lim Hng Kiang said the government has also started to release land parcels with shorter tenures. These properties are targeted at small- and medium-sized enterprises which require customised land-based facilities at more affordable prices.

Mr Lim was replying to a question on how the Ministry of Trade and Industry plans to keep industrial land affordable for SMEs.

Noting that the misuse of industrial space by non-industrial users could have contributed to the increase in industrial prices and rental, Mr Lim emphasised that the government will continue with enforcement actions.

He acknowledged that industrial land prices have gone up sharply over the last three years, but said that Singapore's land prices and rental remain competitive compared to alternatives in neighbouring countries.

URA's rental index for industrial properties rose by 1.2 per cent in the third quarter of 2012, moderating for the 2.8 per cent increase in the previous quarter. This likely reflects a moderation in the underlying demand for industrial space, relative to supply, which has increased in recent quarters. However, industrial property prices continue their upward trend in the third quarter of 2012.

Mr Lim said: "There are two things that we have to watch, one is industrial land rentals and the other is industrial land prices. Now, as you can see, there seems to be a divergent. Land rentals have not increased as sharply as land prices. So land prices have gone up by, as Inderjit Singh said, very sharply over the last three years.

"But if you look at land rentals, it has gone up by 30 per cent over the last three years, and if you look at the longer period, in fact, land rentals has been very flat from 2002 to 2007 and there's a pick up since then."


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