More industrial properties put up for mortgagee auction as leasing demand falters

36 properties went under the hammer last year.

Tough leasing conditions in the industrial property segment have led to an increase in mortgagee auctions for industrial properties, according to a report by Colliers.

The number of industrial mortgagee listings more than doubled in 2015. A total of 36 industrial properties were put up for auction last year, compared to just 17 in 2014.

“Many small-scale investors, who entered the industrial market prior to the government’s imposition of Sellers’ Stamp Duty and TDSR in 2013, are now finding it challenging to service their bank loans,” said Grace Ng, Deputy Managing Director of Colliers International.

Many of the industrial properties were small strata-titled industrial units in various locations such as Kaki Bukit, Ubi, Geylang and Boon Lay, Colliers said.

“In addition, owing to the macro-economic uncertainties, end-users and industrialists were cost sensitive and cautious on their space requirements. Competition for qualifying industrial tenants has also intensified, following the net addition of approximately 5.7 million sq ft of new multi-user factory space in 2014 and 3.7 million sq ft in the first nine months of 2015,” she added.