Positive signs in industrial market

Singapore’s industrial property market could bottom out soon as macroeconomic forces gather strength. “The Purchasing Manager Index has been hovering above 50 since September 2016, which indicates expansion in manufacturing activities, while non-oil domestic exports are generally trending up despite short-term fluctuations,” says Lee Nai Jia, head of research at Edmund Tie & Co.
Lee was speaking on the industrial property market and outlook on July 1 at T-Space, a new ramp-up industrial development located at Tampines North Drive 1, in the vicinity of IKEA Tampines, Giant hypermarket and Courts Megastore. T-Space developers Lian Beng Group and Oxley Holdings recently released new units on Level 6 for sale. They are also offering star buys. The first batch of [90] units released has been fully sold, says Andy Tan, associate senior division director at Huttons Asia, one of the marketing agencies for the project, alongside ERA Realty Network and Singapore Realtors Inc (SRI).
Lee notes that the occupancy rates for industrial properties tend to lag the pickup in manufacturing output by about two quarters to a year. However, they have remained fairly stable, along with rents and prices, particularly those for first-storey spaces, where supply is limited. Industrial properties are also not subject to the hefty additional buyer’s stamp duty, unlike residential properties.
T-Space is a ramp-up industrial development by Lian Beng Group and Oxley Holdings, located in the vicinity of IKEA Tampines, Giant hypermarket and Courts Megastore
“The manufacturing sector is evolving. The future of manufacturing will be driven by several key segments, including e-commerce, logistics and semiconductors, as gadgets become smarter,” Lee says. According to Edmund Tie & Co Research, net yields for industrial space range from 6% to more than 7%.
Lee also urges potential investors to examine the development plans for the area where the property is located. Tampines, for example, is slated for more transformation, with new transportation networks and other amenities on the cards.
Lee notes that occupancy rates for industrial properties tend to lag the pickup in manufacturing output by about two quarters to a year
Bruce Lye, managing partner of SRI,...