Industrial property sector recovers from 3 straight quarters of slump

355 caveats were lodged for industrial properties in 2Q.

Aided by the expansion of the manufacturing sector in the second quarter, demand for industrial properties made a turnaround from the three consecutive quarters of fall.

Savills estimates that a total number of 3551 caveats were lodged for strata factories and warehouses in Q2/2016, bringing the 1H/2016 total to 598 transactions. Although there were 46.1% more caveats lodged than the first quarter, it was a 22.1% YoY dip from the 456 deals witnessed in Q2/2015.

According to the Urban Redevelopment Authority (URA), the total value of these transactions reached more than S$0.6 billion, surpassing last quarter’s value by 76.7%.

The highest sales volume among the strata industrial developments was recorded in Win5@Yishun where 11 units changed hands at an average unit price of S$243 per sq ft. This was closely followed by 10 units in North Link Building@Sembawang that transacted at an average unit price of S$160 per sq ft.

The research firm notes that notwithstanding the increase in sales, upper-storey factory and warehouse units in the Savills basket did not show any price appreciation.

"Owners of 30- year leasehold industrial units in particular, seemed to be more willing to accept lower prices. This was refl ected in the 4.2% QoQ decline to S$368 per sq ft. However, sellers of 60-year leasehold industrial properties held their ground well, with prices only inching down marginally by 0.5% QoQ to S$466 per sq ft," it exlained.

For freehold industrial developments, given their limited supply in Singapore, prices managed to buck the generally downward trend and rose slightly from S$688.77 per sq ft in Q1/2016 to S$688.99 per sq ft in Q2/2016.