Knight Frank sees interest in plot near ITE East (Yishun) due to recent strong take-up in Woodlands

FOR the second time in a week, the government will be putting an industrial site in Yishun up for tender.

According to the Urban Redevelopment Authority (URA) yesterday, a developer triggered the sale of a 60-year leasehold site at Yishun Avenue 6 (Parcel 8). The developer – which was not identified – committed to pay at least $11.5 million, or around $30 per sq ft per plot ratio (psf ppr), for the land.

The 1.43 ha plot on the reserve list has been available for sale since November 2007. It is zoned for Business 1 use and has a maximum permissable gross plot ratio of 2.5.

This parcel is across the road from ITE East (Yishun) and is near Yishun Industrial Park and Yishun MRT station. It also seems to be adjacent to another site – at Yishun Avenue 6 (Parcel 1) – which was similarly triggered for sale on Tuesday. For the latter, a developer also committed to pay at least $11.5 million.

Knight Frank’s head of industrial business space Lim Kien Kim believes that there will be interest in Parcel 8. This is because industrial space end-users have been looking for land in the northern part of the island, he said.

He added that industrial space in Woodlands has recently seen strong take-up, and this could encourage developers to bid for the site.

Mr Lim felt that offers could reasonably be expected to come in at around $35 psf ppr, or $13.4 million. But he pointed out that with buoyant sentiment in the market, higher bids are possible.

URA will launch the public tender for the site in about two weeks.

Demand for industrial plots has been strong in the last few months. In December, a 30-year leasehold site at Pioneer Road North/Soon Lee Drive drew eight bids, with the highest coming in at $19.4 million, or $48 psf ppr.

Source: Business Times, 27 Feb 2010

More land for industrial use is being made available to the market.

The Urban Redevelopment Authority (URA) said on Tuesday that it has accepted an application from a developer to put up the industrial site at Yishun Avenue 6 for public tender.

The land parcel was made available for sale through the Reserve List system in May 2007. Under the system, a site would be released for sale only if a bid with an acceptable minimum price is received.

URA said it has received an application from a developer who has committed to bid at a price of not less than S$11.5 million for the land parcel. As such, URA is making public the minimum price committed for the site.

It will launch the public tender for the site in about two weeks.

The site, which has a maximum permissible gross plot ratio of 2.5, has a 60-year lease period and an area of 14,192.8 square metres.

Source: Channel News Asia, 23 Feb 2010

Healthy demand for industrial properties expected in 2010, say analysts

JTC Corp yesterday said that net allocation of its ready-built facilities (RBF) returned to positive territory in Q4 2009. In the first three quarters of 2009, net allocation was negative as termination outstripped gross allocation.

But net allocation for the whole of 2009 was still negative as the group’s properties were hit by weak global economic conditions.

Net allocation was negative 24,800 square metres in 2009. By comparison, net allocation was a positive 90,700 sq m in 2008.

But in Q4, net allocation was a positive 2,100 sq m. Net allocation was negative 8,900 sq m in Q1, negative 7,800 sq m in Q2 and negative 10,300 sq m in Q3.

The occupancy level at the RBF also rebounded slightly in Q4, climbing up 0.1 percentage point from Q3 to end 2009 at 97.2 per cent.

Year-on-year, the occupancy level rose by 0.4 percentage points. The drop in demand over the year was offset by lower supply as stock was retired for product renewal, JTC said.

Analysts have said that the industrial sector here could see a turnaround this year.

‘A healthy demand for industrial properties is expected in 2010 and rents are projected to begin their upward climb in the second half of the year,’ said CB Richard Ellis in its Q4 2009 report on the Singapore market.

DTZ likewise predicted that the industrial market may see a turnaround in 2010 with rental decline easing off gradually and rents bottoming by the end of this year.

Within the RBF, the business park segment experienced the biggest year-on-year fall, with net allocation dropping to 1,100 sq m in 2009 from 48,300 sq m in the previous year.

However, the decline was from an exceptionally high base in 2008 which benefited from the completion and take-up of Fusionopolis Phase 1.

Fusionopolis phase 2A is currently under construction and is expected to be completed by 2014.

Net allocation for JTC’s prepared industrial land (PIL) managed to stay in positive territory in 2009. Net allocation for this segment came to 101 ha in 2009, compared to 200.9 ha in 2008.

The performance, which JTC said was ‘resilient’, was supported by a significant allocation in the fourth quarter of 2009 for the integrated yard facility in Tuas as well as steady take-up for Seletar Aerospace Park. Net allocation for Q4 2009 was 105 ha.

Overall, gross allocation of PIL fell 34 per cent to 175.6 ha in 2009 while termination increased 17 per cent to 74.7 ha. A large proportion – 44.6 ha or 60 per cent – of the land terminated came from the manufacturing sector.

Within manufacturing, the electronics segment registered the highest termination with 23.9 ha given up, followed by the precision engineering segment with 7.3 ha terminated.

A total of 30.1 ha – or 40 per cent – of PIL termination came from the manufacturing related & supporting industries sector.

Source: Business Times, 18 Feb 2010

GLOBAL economic woes triggered a lower take-up of industrial space last year at landlord JTC Corp.

It was hit by a negative net take-up of 24,800 sq m in ready-built factory space last year; a sharp reversal of the positive net take-up of 90,700 sq m seen in 2008.

In prepared industrial land, net take-up was still positive at 101ha last year, although much lower than the 200.9ha in 2008.

Faced with extremely cautious business sentiment during the year, companies took up less space. Ready-built factory space was down on the previous year partly because of a downturn in the business park segment. It saw net take-up in this category drop to 1,100 sq m last year, from 48,300 sq m in the previous year.

JTC explained, however, that the drop in ready-built factory space take-up ‘was from an exceptionally high base in 2008, which benefited from the successful completion and take-up of Fusionopolis Phase 1′.

Termination of its ready-built facilities fell by 18 per cent to 88,800 sq m last year from 108,000 sq m in 2008. About 61 per cent, or 53,900 sq m, of the total of ready-built facilities were terminated by tenants from the manufacturing sector.

Within manufacturing, the precision engineering and electronic segments reported terminations of 17,000 sq m and 16,200 sq m respectively.

Take-up in the prepared industrial land category remained resilient, according to JTC. It said the performance in this category was boosted by a significant fourth-quarter take-up for the integrated yard facility in Tuas, as well as steady take-up for Seletar Aerospace Park.

Last year, the manufacturing sector accounted for 60 per cent of the prepared industrial land that was terminated. The electronic segment of manufacturing registered the highest termination, with 23.9ha given up.

Source: Straits Times, 18 Feb 2010

EVEN in property-obsessed Singapore, industrial sites are often dismissed as drab, dull areas that hold no interest for the general public.

But new-era industrial parks like the one planned at Lorong Halus in Tampines could change all this.

Formerly a landfill, the land is now home to a wide diversity of wildlife.

When it is turned into an industrial park in the years to come, factories and plants will be sited among lush greenery and waterfront lifestyle amenities that the public can use.

The planned Lorong Halus industrial area was one of the examples cited by the Economic Strategies Committee sub-committee on how to make better use of land. Among its recommendations was a suggestion to better integrate residential, business, leisure and even ‘clean’ industrial uses into ‘live-work-play’ enclaves.

Source: Straits Times, 5 Feb 2010

It’ll have more facilities for pre-clinical trials; medical tech cluster also in the works at Tukang

THE government is ramping up development of the biomedical sciences sector, with plans to release another site at Biopolis for tender and set up a new medical technology cluster at Tukang.

Phase Four at Biopolis could cost some $80-$100 million to build and will have more facilities for pre-clinical trials, JTC Corporation said yesterday.

The expansion will add another 40,000 square metres of gross floor area (GFA) to the biomedical research and development (R&D) centre in Buona Vista. JTC will award the project to a private developer this year, and the site could be ready by end-2012 or early-2013.

According to JTC, there has been an increase in demand for R&D spaces. Gross expenditure on R&D was $7.18 billion in 2008, or 2.77 per cent of GDP. Singapore’s aim is to have this reach 3 per cent of GDP, JTC said.

Biopolis currently comprises three phases, which together cost close to $700 million to develop. Phases One and Two have more facilities for basic research. Phase Three is under construction and should be completed by the end of this year.

Phase Four will house more facilities for pre-clinical trials. There will also be laboratories built around a ’shelf-plus’ concept, fitted with basic equipment and furnishings to help reduce set-up costs for smaller outfits.

Over in the Jurong area, JTC is drawing up plans for a medical technology cluster that will house sterilisation facilities, warehouses, laboratories, equipment manufacturers, suppliers and other supporting firms under one roof.

The cluster would be located next to Tukang Innovation Park and could be built in two phases, each measuring 40,000 square metres. The first phase could cost $60-80 million to develop.

According to JTC, the medical technology industry is headed for more growth. Singapore’s manufacturing output from the sector is expected to increase from $2.9 billion in 2008 to $5 billion by 2015.

Going by data from the Economic Development Board yesterday, the biomedical manufacturing sector (which includes medical technology and pharmaceutical activities) attracted $1.1 billion of fixed asset investment commitments in 2009.

JTC believes that the cluster environment would foster greater collaboration within the medical technology industry and lead to several benefits, such as faster product developments.

The agency is in talks with companies in the industry to obtain their feedback on the concept. If it takes off, the first phase of the cluster could be ready towards the middle or end of 2013.

JTC is also working on a concept for high-rise biologics plants. These plants would have plot ratios which are almost double those of traditional low-rise plants and would take up less land.

Source: Business Times, 26 Jan 2010

A FREEHOLD ramp-up light industrial building will be coming up at 9 Tagore Lane and its developer is putting it up for sale.

The four-storey 9@Tagore will comprise 124 units ranging from 1,800 sq ft to 4,800 sq ft. Prices for the units start from $410 per sq ft, and the building is expected to receive temporary occupation permit at end-2011.

3M Building, which currently occupies the site, will make way for the new property developed by Chiu Teng @ Tagore Pte Ltd.

Colliers International is marketing 9@Tagore. According to its industrial director Tan Boon Leong, the building is the only freehold ramp-up industrial development in Singapore that is available for strata sale.

9@Tagore would attract companies looking for new space given that most of the existing industrial developments in the vicinity are five to 20 years old, he said.

‘Additionally, given its high potential yield of 5-6 per cent, the development is also likely to appeal to investors,’ he added.

‘On the back of an expected improvement in both the economy and the manufacturing sector, as well as more optimistic business sentiment, we expect to see a pick up in the demand for industrial space.’

9@Tagore will have an integrated ramp-up driveway providing direct access to all units. There will also be a loading bay for 40-foot prime movers.

Units there would be suitable for housing storage facilities, light assembly and production facilities or ancillary showrooms. Most of them are column-free and have a floor-to-ceiling height of six metres.

Source: Business Times, 19 Jan 2010

Mainboard-listed Natural Cool Holdings said its unit has told its property at 29 Tai Seng Avenue to Emirates Tarian Capital for S$53 million.

After the deal is done, Natural Cool Investments will leaseback the property for 10 years at an annual average rent of S$4.74 million.

Natural Cool’s CEO, Joseph Ang, said the sale is in line with the firm’s efforts to adopt an asset-light strategy.

He added that the firm has not decided what to do with the proceeds of the sale, but may use it to repay bank borrowings, to distribute to shareholders as dividends, or to use as working capital to fund future growth and expansion.

The proposed sale and leaseback deal is subject to shareholder approval, as well as legal and binding due diligence on the property.

Source : Channel News Asia, 14 Jan 2010

INDUSTRIAL property prices could be heading up anytime by Q2 2010, says Colliers International, citing the close link between that sector and the improved residential property market.

The property consultancy took a look at historical trends and found that industrial property prices have typically lagged residential property prices by one to three quarters.

For instance, when the home price index bottomed in Q4 1998, the industrial property price index hit a trough three quarters later in Q3 1999. And when home prices reached a high in Q2 2008, industrial property prices peaked shortly after in Q3 2008.

‘If past trends were to hold true, the industrial strata property market could be poised for a recovery in Q4 2009 at the earliest, or Q2 2010 at the latest, given that the residential property market bottomed out in Q3 2009,’ Colliers said.

After a year-long decline, the private home price index managed to turn around with a 15.8 per cent gain in Q3 from the previous quarter, supported by a surge in demand for suburban homes. The government estimates that the index continued to climb by 7.3 per cent quarter-on-quarter in Q4.

Colliers added that the industrial strata market has been drawing investors’ attention. Various developments have made it ‘a good alternative for property investors traditionally familiar only with investing in residential properties’.

For one thing, there has been an increase in the supply and variety of strata-titled industrial properties, and Colliers foresees more projects being launched soon.

Industrial properties have also become more affordable as an increasing number of them are on short leaseholds of 30 or 60 years, or have units measuring less than 1,000 square feet in size. Many such properties can be bought for less than $500,000, Colliers noted.

And while properties with shorter leaseholds cost less, they can command rents similar to those of properties with longer leaseholds, leading to higher rental yields raging from 6.5-7 per cent.

Colliers observed that demand is also returning for strata-titled industrial properties. As at end-November last year, some 690 transactions had taken place in the market, and this is almost 90 per cent of the volume seen in the same period in 2008.

‘If the buying momentum continues, prices of strata industrial space could start creeping up soon,’ it said.

State industrial land put up for sale in the last few months also drew keen interest from the market, reflecting developers’ confidence that the industrial strata market is near bottom.

Source: Business Times, 14 Jan 2010