Increase in industrial land supply to lower prices, rents

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The increase in industrial land supply under the Government Land Sales (GLS) Programme in H1 2012 will likely make property prices and rents more affordable to genuine end users, said property consultants.

The Ministry of Trade and Industry (MTI) also announced new conditions on the strata subdivision of projects for MTI's industrial sites under the GLS Programme, which will help industrialists who have been priced out of the market.

This will put a limit on the increase of small industrial units sought after by property investors and speculators, which has pushed up industrial property values. In turn, project developers have also increased industrial land prices at state tenders.

Lim Kien Kim, Senior Director (Industrial) at Knight Frank, believes that developers who have been building strata industrial projects will now step back to see what happens.

As a result, this will lower industrial GLS land tender prices, which have roughly doubled in the past year.

Meanwhile, industrialists may also take advantage of the 18 small plots at the Tuas View Extension, which are being offered with a 19-year short tenure. The plots have a 1.0 plot ratio and may be developed into landed factories.

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