From iTODAY | Neo Chai Chin | 16 Nov, 2012 8:34 PM

SINGAPORE

Long-term investors play an “important role in the business ecosystem”, and restricting their purchase of industrial properties will have a significant impact on businesses, said Minister for Trade and Industry Lim Hng Kiang today in Parliament.

He was responding to Ang Mo Kio Member of Parliament Inderjit Singh, who asked if the Government would consider disallowing industrial properties to be bought for investment purposes and allow them to be bought only by users.

Industrial land prices have shot up 60 per cent in the past two years, and industrial rentals have gone up by about 30 per cent in the last three years, putting a squeeze on Small and Medium Enterprises (SMEs).

Mr Lim noted that most SMEs rent their premises and said his Ministry tracks industrial land prices and rentals closely, ensuring they are competitive internationally.

But there are currently no restrictions on investors purchasing industrial properties. Twenty-seven per cent of multiple-user factory space is owned by real estate investment trusts or big developers, “which is not a very big percentage”, he said.

Mr Lim said some industrialists prefer to rent industrial space for greater business flexibility. Allowing investors to participate provides options and reduces upfront capital costs for businesses, while keeping rentals competitive.

Mr Lim reiterated that the MTI will release sufficient land through the Industrial Government Land Sales programme to meet the needs of industrialists and moderate prices and rentals. It has also started releasing smaller land parcels with shorter tenure targeted at SMEs under this programme, and will ensure industrial space is not misused.