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Overall investment sales in the local industrial property sector slumped 30 percent year-on-year and 56 percent on a quarterly basis to $276.1 million in Q1 2018 given the sluggish demand for government sites, reported Singapore Business Review.
In fact, the industrial sites at Jalan Lam Huat (Plot B), Tampines North Drive 3 (Plot 2) and Tuas South Link 3 (Plot 27) all attracted bids lower than their respective reserve prices so they were not sold, according to a report from Colliers International.
Additionally, some confirmed list sites available for tender for the first half of the year received no bids like that for Tuas South Link 3 Plot 18 and Plot 21.
Meanwhile, the private sector accounted for nearly all investment sales during the quarter. However, transaction volume in this segment fell 29.5 percent on an annual basis and 56.2 percent quarter-on-quarter to $273.5 million.
“The largest transaction was Cache Logistics Trust’s sale of 40 Alps Ave to a property fund for $73.8 million or $239 psf. ESR-REIT, AIMS AMP Capital Industrial REIT and Sabana REIT also divested properties during Q1 2018,” said Colliers research head Tricia Song.
Despite the weak activity in the industrial market, there is growing interest from industrialists to acquire prime spaces as rents hit rock-bottom.
“We also foresee increasing interest in logistics and high-specifications industrial properties from qualified institutional investors seeking higher yield,” Song added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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