Wait and see: Cautious buyers drag industrial land sales in Q2

Most buyers are biding their time.

Warehouses weren’t such hot commodities in Q2. The strata-titled industrial sales sector again posted lacklustre results in the second quarter, as transaction volumes continued to suffer the repercussions from the implementation of the Total Debt Servicing Ratio (TDSR).

According to Colliers, prospective buyers are biding their time in the hope of a price moderation in the near future.

“Prospective buyers – especially those who disagree with sellers’ prevailing price expectations – were in no hurry to lock in their purchases. This is due to the ample choices in the market and interest rates, though creeping upwards, are still expected to remain low for the time being. In fact, there were some buyers who were anticipating a price correction,” notes Tan Boon Leong (陈文龙), Colliers Executive Director of Industrial Services | Project & Sales.

Here’s more from Colliers:

The average capital values of prime freehold warehouse space maintained at the past two quarters’ level of S$661 per sq ft and S$587 per sq ft for ground- and upper-floor space, respectively, in 2Q 2014. Meanwhile, the average capital values of ground- and upper-floor space for prime freehold conventional factory space were S$863 per sq ft and S$736 per sq ft, respectively.

The strata-titled industrial sales sector remained subdued in 2Q 2014 – with transaction volume still suffering the repercussions from the implementation of the Total Debt Servicing Ratio (TDSR). 

Mr Tan Boon Leong (陈文龙), Executive Director of Industrial Services | Project & Sales, says, “The release of units in seven new industrial developments during the quarter, up from just two in 1Q 2014, did not help to lift the overall sales – on the back that buyers were still adopting a cautious and selective buying stance.” 

The seven developments included HH @ Kallang (Kallang Pudding), Carros Centre (Jalan Lam Huat), T99 (Tuas South), West Star (Tuas Bay Close), West View Food Factory (Tuas Bay Walk), Loyang Enterprise Building (Loyang Way) and Nordcom I (Gambas).