The Ministry of Trade and Industry (MTI) has in June 23rd revealed that it will announce the Industrial Government Land Sales (IGLS) program for the second quarter in the calendar year. The program comprises five sites on the Confirmed List that have an overall site size of 6.43 square hectares (692,119 sq feet) as well as three sites on the Reserve List totalling 3.38 ha (363,820 sq feet). Together they sites cover a total surface totalling 9.81 acres (1.06 million square feet).
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The site area included in the Confirmed List constitutes the equivalent of a 63.2% bump up from the 3.94 ha that was launched across four sites in the first quarter in the calendar year. according to Lee Sze Teck, senior director of research at Huttons Asia. “This is the biggest supply of land for industrial use since 2H2014, when 9.5 hectares of industrial land were released,” he adds.
The five sites on the Confirmed List lie in Tampines North Drive 5, Tampines North Drive 4, Tuas Bay Drive, Gambas Way as well as Tuas Link Close. In addition, the sites that are listed on the Reserve List include two along Jalan Papan and one along Tuas Road. The two sites include Plot 3 Jalan Papan and the site located on Tuas Road – are currently on the Reserve List.
Sites that are listed on the Reserve List will be put open for tender there is a chance that an interested party makes an application containing offering a purchase price that is accepted by the government or more than one person offers minimum purchase prices that are that are close to the reserve value within an acceptable time.
The rise in the supply of industrial land comes as rents and prices have risen even as the outlook is bleak for Singapore’s export and manufacturing sectors. In the 1Q2023, JTC data showed industrial property prices rose 1.5% q-o-q, while industrial rents grew to 2.8% q-o-q. “Prices and rents for industrial space have pushed past the downbeat outlook and have increased in the last couple of months” declares Huttons’ Lee.
In this regard, he thinks that the government could be increasing the amount of industrial land available in an effort to limit the growth in rental and price as well as help companies manage the cost of occupancy. “This could lead to slowing down the industrial property market about two to three years down the line,” he opines.