Nov 4, 2010 - CommercialGuru.com.sg
While gilded bungalows and glitzy condominiums dominate the limelight, industrial properties are also drawing their fair share of buyers.Cushman & Wakefield said $3.42 billion worth of factory units were sold in the first nine months of the year, up 87 percent compared to the $1.83 billion in sales for the whole of 2009.
To date, the transaction value is only $290 million lower than the $3.71 billion worth of factory units sold in 2008.
Warehouses have also been in demand, with transactions in the first nine months reaching $83.3 million, nearly triple the $28 million in 2009.
“The keen buying interest for industrial properties was fundamentally underpinned by a recovery of the manufacturing sector. The healthy performance of manufacturing encouraged industrialists to expand,” said Ong Kah Seng, Senior Manager of Asia-Pacific research at Cushman & Wakefield.
Increasing demand for industrial space has resulted in growing rents, with Singapore’s average prime warehouse rent up 3.3 percent from $1.51 psf in H2 2009 to $1.56 psf per month in H1 2010, said Colliers International.
This makes Singapore the world’s seventh most expensive market to rent a prime warehouse, up two notches from ninth place six months ago.
Tokyo, Heathrow in London and Hong Kong occupied the top three spots in the newest ranking.
Aside from end-users, investors have also shown interest in industrial assets; a factory unit needs a smaller capital outlay and gives a higher yield than a private home, said Mr. Ong.
