NEW WORRIES EMERGE IN THE INDUSTRIAL PROPERTY SECTOR

NEW WORRIES EMERGE IN THE INDUSTRIAL PROPERTY SECTOR

Sep 20, 2011

The weakening sentiment in Singapore’s residential property market is slowly seeping into the industrial property market, with analysts expecting cautious bids in land tenders and lesser demand for office space, according to The Straits Times.

Analysts noted that the European debt crisis, US recession, slow economic growth and tighter foreign labour policies are adding to a mood of uncertainty.

Meanwhile, Global Orion Properties said that policies on hiring overseas workers need a review to further boost the industrial property sector.

“There may be signs of a global economic slowdown but there are no conclusive indicators that a recession is imminent,” said Global Orion Director Satia Narjadin.

“Should there be one, we believe in the resiliency of Singapore’s industrial sector and are confident that with the government’s pro-activeness and support, the impact will be minimized.”

He noted that industrial property prices are not expected to increase by as much as they have in the last two years. However, strong and genuine demand is still expected, attributed to the recent cooling measures in the residential property market.

“The recent measures have created a larger pool of potential buyers which will drive demand in industrial developments. It has been reported that rental prospects in Singapore is the strongest in Asia Pacific and that rents were up five percent in the first half of 2011 compared to the previous year. Total returns on prime industrial property are expected to be approximately 12 percent over five years,” he said.

Info courtesy - PropertyGuru.com.sg