Industrial property prices to rise by 5 - 10% next year

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Industrial property prices will rise by five to 10 percent in 2012, while rentals should record moderate growth of three to eight percent year-on-year, according to SLP International.

“With the Singapore government’s 2012 growth forecast for the country at only one percent to three percent, industrial real estate prices and rentals are unlikely to escalate at the pace witnessed in 2011,” it said.

Due to robust occupier demand and limited stock for landed terraced factory space, demand for such space should hold up compared to other types of industrial property in the event of an economic slowdown, analysts from the property firm said.

Meanwhile, small strata-titled factory units have attracted significant investor demand over the past few quarters, which has resulted in “near speculative” prices that could fall if the economy experiences a prolonged and significant dip, said SLP.

“For the whole of 2011, the industrial property segment has witnessed a general increase in the proportion of investors to owner-occupiers in primary sales launches.”

“When the economic climate turns cautious, this group of investors can also be expected to tighten their purse strings, possibly leading to an overall moderation of buying demand.”

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