The industrial property market is expected to be subdued this year following a fairly eventful 2013, a media report said quoting market watchers.
Notably, the cooling measures introduced last year were more aligned towards end users.
“Generally there were some measures introduced by the government with the intention to support industrialists over speculators,” said Desmond Sim, Associate Director at CBRE Research.
They include the Seller’s Stamp Duty, Total Debt Servicing Ratio, a longer holding period for industrial properties on JTC-leased sites and an extension of the minimum occupation period for anchor tenants.
Chia Siew Chuin, Research Head at Colliers International, noted that the measures did not only prevent a runaway in industrial property prices and rents, it also helped rein in the real estate cost of industrialists.
In 2014, the industrial property market is expected to see a moderation in rentals as well as strata sales.
“Industrial property prices and rents could soften in 2014 – on the back of new market measures, loan policy tweaks and higher supply amid a cautiously optimistic economic outlook and industrialists’ continued cost-conscious stance,” Chia said.
Based on URA data, around 20.9 million sq ft of industrial space is due to come onstream.
“While demand might be buoyed by a recovering manufacturing sector, there is the possibility that it might not be able to digest the high level of future and existing supply available,” said CBRE’s Sim, noting that industrial rents are also expected to face downward pressure.
Aside from sifting out most speculators, property measures may also lead to a more stable strata sales market, he added.
Overall, the situation is unlikely to be too different from 2013.
Meanwhile, Nicholas Mak, Head of Research and Consultancy at SLP International, said: “We don’t expect much change in the industrial property market landscape.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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