No room for negotiation: Industrial property sales slide 39.2% in Q3 amid ongoing price standoff

Stingy industrialists are waiting for prices to fall.

It has been a quiet quarter as industrial property sales registered a 39.2% quarter-on-quarter decline, thanks to the ongoing price standoff between buyers and sellers.

According to Colliers, there were only 194 caveats lodged for strata-titled transactions in 3Q 2014, which is 39.2 per cent below the 319 caveats registered in 2Q 2014.

Colliers notes that although sellers have shown greater willingness to negotiate during the quarter, prospective buyers remain cautious and selective since there are ample choices in the market.

“However, we noticed that projects with strong attributes, such as higher building specifications and convenient location, as well as developments catering to niche industries are still in demand. For example, the 41-unit WestView Food Factory in Tuas saw strong sales performance and is reportedly sold out within a few months,” said Tan Boon Leong, Executive Director of Industrial Services | Project & Sales, Colliers Singapore.

“The appeal of industrial properties to investors has also dropped due to the lingering effects of Total Debt Servicing Ratio requirement, as well as the imposition of Sellers’ Stamp Duty. Furthermore, fewer investors were acquiring in the strata-titled sales market, as many of the new industrial projects that were released for sale during the year either have 30-year tenures which investors typically prefer longer ones or were zoned for ‘Business 2’2 use, intend