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Industrial landlord JTC will release seven sites under the reserve list and five sites in the confirmed list for the first half of 2019, which amount to a total site area of 11.86 hectares.
The figure is slightly down from the second half of 2018’s six confirmed list sites and seven reserve list sites, which totalled 12.59 hectares.
All the sites are zoned Business 2, which allows for heavier and more pollutive industrial use. They have a gross plot ratio of 1.4 or 2.5, reported the Business Times.
The site at Senoko Drive emerged as the biggest by gross floor area (GFA) at 323,000 sq ft. It is also the only site within the confirmed list to have a 30-year tenure.
The other sites at Tampines North, Woodlands, Gul Circle and Jalan Papan have a 20-year land tenure.
Meanwhile, four of the seven reserve list sites for H1 2019 have a 20-year land tenure. The two biggest, which span 2 hectares each with a GPR of 2.5, are located at Kaki Bukit Road and Benoi Sector.
The rest can be found at Gul Circle, Tuas South Link, Gambas Way, Tampines North and Tuas Avenue.
“The decrease in land supply is probably due to concerns of the slowing growth of manufacturing sector, especially given the uncertain external environment,” said Knight Frank senior director and head of research Dr Lee Nai Jia.
Cushman & Wakefield senior director and head of research Christine Li believes the US-China trade war tensions and uncertainties in the global outlook moderated demand for industrial space last year.
Industrial rents dropped 0.1 per cent in Q3 2018, marking its 14th consecutive quarterly decline.
“Net demand measured by absorption of multiple-user factory space for first nine months of the year was just 1.2 million sq ft, a significant decrease from the 2017 full-year absorption of 3.9 million sq ft,” said Li.
“Similarly, warehouse net absorption over the same period fell to 2.9 million sq ft as compared to the 8.6 million sq ft absorption in 2017.”
Demand for Industrial Government Land Sales (IGLS) sites have also been muted. In fact, two out of the four confirmed list sites that were tendered in H2 2018 were not awarded as the bids submitted were deemed too low by the government.
But while the number of confirmed list sites released by the government under the H1 2019 IGLS programme fell from six to five, “the total GFA offered rose slightly from 824,000 sq ft in H2 2018 to 894,000 sq ft”.
“The stable supply of sites on the confirmed list will lend support to the industrial market in the short to medium-term, as industrial rents have stagnated due to the supply overhang in the preceding years,” said Li.
“As such, the continued tapering of new supply will lead to marginal increases in rents despite the slowdown in manufacturing growth,” she added.
She expects factory rents to increase by 0.5 percent, “while warehouse rents may rise by 1.0 percent as demand for warehouses has picked up due to rising competition in the e-commerce space”.
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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