Three new sites on industrial GLS programme for H2

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THREE sites have been added to the government's industrial land sales
programme for second-half 2009, which was launched yesterday by the Ministry of
Trade and Industry (MTI).

The three sites have been added under the
reserve list to continue to meet potential demand for industrial land, MTI
said. This brings the total number of industrial sites on the reserve list to
nine.

The confirmed list, on the other hand, remains suspended.

'In view of current economic uncertainties, MTI will continue to suspend the
confirmed list for the second half of 2009,' the ministry said in a statement.
'This will provide flexibility for the market to adjust supply in accordance
with the current economic conditions.'

Market watchers said that the
continued suspension of the confirmed list was expected. Using the reserve
list only means the market will have the final say on when a site is
released.

Under the reserve list system, the government puts up a site
for public tender only if it receives an application from a developer who
commits to bid for the site at or above the minimum price acceptable to the
government.

'This is in line with the government's aim of letting
developers decide if they are interested in a site and letting them trigger the
sites they like,' said Savills Singapore managing director Michael Ng.

The three new sites on the reserve list are at Woodlands Avenue 12, Kaki Bukit
Avenue 4 and Ubi Road 1/Ubi Avenue 4. In addition, six sites from the
first-half 2009 reserve list have been carried forward to the second-half
list.

The nine sites on the reserve list have a combined area of about
19 hectares.

It is unclear if the demand for these will be strong,
analysts said. Singapore experienced a sharp drop in industrial investment
sales in the first quarter of this year, with only a few isolated transactions
completed.

However, sentiment picked up in the second quarter. Data
from CB Richard Ellis (CBRE) showed there were at least six investment
transactions in the industrial sector in Q2 - totalling $58.9 million. Most of
the buyers were end-users, CBRE said.

Singapore-listed real estate
investment trusts (Reits), which bought up a significant amount of industrial
property during the boom in 2007, are still holding back on acquisitions this
year as dividend yields have increased significantly and it would be extremely
challenging to make purchases that are yield accretive. Obtaining finance also
continues to be difficult.

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