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New industrial sites offered in first half of 2008

Land release to keep up supply, ease pressure on business costs

ONE new industrial site – in Woodlands – will be put up for tender early this year, while three in north and central Singapore will be open for applications.

The land release, announced by the Ministry of Trade and Industry yesterday, is designed to keep up the supply of land and take some of the pressure off business costs.

All four plots listed yesterday come with 60-year leases.

A 1.68ha plot in Woodlands Industrial Park is on the confirmed list and will be put up for tender in May.

Another three – a 1.14ha site in Ubi Avenue 4, a 0.54ha site in Kallang Pudding Road and a 0.8ha plot in Serangoon North Avenue 4 – will go on the reserve list in the first half of the year. These will be put up for sale only if a potential buyer commits to bidding a minimum price acceptable to the Government.

Apart from these plots, there are four others – in Yishun Avenue 6, Toh Tuck Avenue and Ubi Avenue 4 – already available for developers to bid on.

Property consultants said the latest list was a good mix of locations to meet demand for industrial space, but some pointed out that the amount of land had shrunk from previous programmes.

In the first half of last year, the Government put out a total of two sites on the confirmed list. This meant the sites were put up for tender at specific dates. It also offered another two sites under the same conditions in the second half.

The head of Knight Frank’s research and consultancy, Mr Nicholas Mak, said the Government is probably toning down as there is enough potential supply out there.

Mr Donald Han, the managing director of Cushman & Wakefield, expects demand to come from two areas: companies that have been forced out of their office premises on the fringes of the Central Business District because of rising rents; and firms bearing the brunt of rising rents within existing high-end industrial parks.

The latter, he said, would be looking to buy their own premises to lock in property costs.

Rents in districts like Alexandra Technopark have risen from about $3 per sq ft (psf) to more than $4 psf now and may continue heading northwards this year, Mr Han said.

‘We will see spillover demand coming out of high-tech parks and going into industrial space,’ he said.

He predicted that the new sites in well-located areas like Kallang Pudding and Toh Tuck would see the most action, especially from developers wanting to build multi-user facilities and sell them on a strata-title basis.

But he has also urged the Government to put out more sites around more centrally-located areas like Paya Lebar, Kallang and the Lower Delta area, which are popular for their accessibility.

‘The sooner we get this out, the sooner supply will meet demand,’ added Mr Han.

Savills’ industrial director, Mr Dominic Peters, felt there was some demand for industrial sites up north, but there could be a mismatch in supply due to the nature of the sites being offered.

The new 1.68ha Woodlands plot put up for tender, for example, may be too small for companies looking for premises on the ground floor.

Mr Peters said developers would need at least 2ha to 3ha to build efficient ‘ramp-up’ buildings, which give each industrial unit in a multi-storey building ground-floor access via giant ramps.

Still, he expected demand for industrial sites to be ‘good’ for the next one to two years.

 

Source: The Straits Times 1 Jan 08

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