Strong demand for Industrial property in Q1 2012

The Singapore economy has rebounded strongly after the 2008 financial crisis. This has led to strong demand for properties including the industrial properties for the past few years.  

According to property analysts, the industrial property sector has achieved an average capital appreciation of about 23% from 2010.  Going forward, the trend might continue as they tends to provide better investment yields as evidenced by the Q1 2012 data from URA which showed a robust price growth of 7.2% versus the previous quarter.

One property analyst noted that industrial properties rents have increased by an average of 12-15% per year for the last two years. In Q1 2012, the rental increase is 1.8% over last quarter.

Other Experts also noted the low interest rate plus high liquidity environment have help to sustain industrial properties prices.

As the industrial properties’ occupancy rate is still above 93% therefore no price correction is envisaged in the near future.

Most analysts expect the price and rental strong momentum to continue into the second quarter. One expert expects the prices for multi-user warehouse and industrial units to continue its uptrend by 6 to 8%.

Most analysts do not expect the government to implement cooling measures to the industrial properties as this sector occupies only about 10% of  the total property market transactions.

Furthermore, should there be any measures, it should protect genuine business owners that buy industrial unit to hedge against future increasing rent.

7 May 2012