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The trim in industrial land supply is part of the government’s efforts to rebalance the supply and demand for industrial sites in light of the high vacancy.
The government trimmed the supply of industrial land for the second half of 2019 to four confirmed list and six reserve list sites, from five and seven respectively during the first half of the year.
CBRE head of research for Southeast Asia Desmond Sim noted that the confirmed list showed a 35.2 percent cutback in potential supply to 0.58 million sq ft, while the reserve list indicated a 15.3 percent reduction in potential supply to 1.55 million sq ft.
“Although the number of sites on the confirmed list and reserve list were reduced to four and six sites, respectively, there is a clear diverse array of sites in terms of geographical spread,” he said.
“The reduction aims to help rebalance the demand and supply situation in the industrial market,” he added, noting that vacancy rate of both warehouses and factories as at Q1 2019 stands at 10.5 percent, which represents about 52.97 million sq ft of vacant stock.
With all four sites zoned for Business 2 use, the confirmed list sites are situated in Tampines North Drive 5, Tuas West Avenue, Woodlands Industrial Park and Jalan Papan. All sites also come with a 20-year lease tenure.
Meanwhile, four of the six reserve list sites have a 20-year lease tenure, while the remaining two come with 30-year tenure. All six sites are also zoned for Business 2 use. Three of the sites are available, while the other three will be made available in July, September and December based on Ministry of Trade and Industry’s estimate.
Sites on the reserve list will be put up for tender if “an interested party submits an application with an offer of a minimum purchase price that is acceptable to the government” or if there are “more than one unrelated party submitting minimum purchase prices that are close to the government’s reserve price for the site within a reasonable period”.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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