Woodlands’ industrial sites now available

The Urban Redevelopment Authority released its detailed sales condition yesterday for Woodlands’ industrial sites.

Interested developers in purchasing the sites can apply to URA. The plot is located at the junction of Woodlands Avenue 4 and Woodlands Industrial Park E5. It is being offered through a reserve list.

The site, which is for lease in a 60-year period, has an area of 2.5 hectares and a gross plot ratio of 2.5. The site is now available amid the global financial crisis and the continuous plunge of trade that brings pressure on capital values as well as on rents of most industrial properties.

Data from the CB Richard Ellis (CBRE) shows that the investment markets for industrial properties are not doing any better, as it only had one transaction over $5 million during the first quarter of this year. However, in spite of this bad condition, the demands for the new site in Woodlands are unlikely to become strong, analysts reckon.

“In such as weak market, even if there is interest, the price will not be very high,” said Lim Kien Kim, head of industrial business space for Knight Frank.

Bernard Goh, CBRE’s director for industrial and logistics services said, “If there is a bid, the price is likely to be below expectations because of how the market is.”

Traditionally, demand for Woodlands’ industrial properties is weak, Mr. Lim added. He expects a $25 to $30 bid per square foot per plot ratio.

Industrial lease are falling because of the decrease in demand for industrial spaces. Downsizing and consolidation is the best option during these days, and expansion is their least option, said CBRE during their Q1 2009 industrial report.

The CBRE added that monthly rents for hi-tech spaces decrease by 3.3 percent quarter on quarter to $2.90 per square foot in the first quarter. The average monthly rents for upper-floor and ground factory units decrease by $0.10 per sq ft quarter-on-quarter to $1.20 per sq ft and $1.45 per sq ft, respectively.