Posted: 19 December 2012 1645 hrs

SINGAPORE

The Singapore government has set aside nearly 25 hectares of industrial land for the first half of 2013, according to the Industrial Government Land Sales Programme (GLS) released by the Ministry of Trade & Industry (MTI) on Wednesday.

A new regulation by the government now requires developers to build a minimum number of large factory units. This applies to four large land plots with a site area of between 1.8 and 3.9 hectares.

Experts said this will put a lid on rising land prices by discouraging the development of multiple small factory units.

For now, this applies to four large land sites in Buroh Crescent, Tuas Bay Drive, Loyang Way and Tuas South Avenue 3.

Experts believe this will prevent aggressive bidding and “moderate” industrial land prices in 2013.

According to the Urban Redevelopment Authority (URA), for the first nine months of this year, industrial land prices rose by 27 per cent.

Rents too, rose 6 per cent over the same period.

SLP International’s executive director of research & consultancy Nicholas Mak said: “I think that with some of the development conditions that will be attached to some of these industrial land sites, (it) may not really reverse the trend in industrial prices, but it will certainly discourage some of the more “non-traditional” industrial developers from tendering for such sites and it will also be able to help the creation of more suitable industrial space that will be preferred by genuine industrialists and manufacturers.”

The MTI added that the regulations are meant to help small and medium enterprises (SMEs) that require larger industrial spaces.

But not everyone is convinced that this move is enough.

Dennis Wee Group said this is still a cautious outlook, given the fewer number of sites launched for the first half of 2013, compared to the second half of this year where there were 16 industrial sites on the confirmed list and three sites on the reserve list, with a total of 23.72 hectares.

Dennis Wee Group Realty’s senior manager of research & consultancy Lee Sze Teck said: “If you were to look at the number of sites that are being offered in 2013 in the GLS programme, the number of sites on the 22-year lease is actually lesser than what we see in the second half of 2012. On the other hand, the government placed some of these 22 year sites on the reserve list, soif the government is looking at lowering costs, then they should actually offer more sites and choices for SMEs to participate in bidding for these sites, instead of putting some of these sites on the reserve list and letting the SMEs trigger the sites for sale.”

This is not the first time such measures are introduced in the industrial land market.

In June this year, the government shortened the maximum tenure for industrial land from 60 to 30 years to allow SMEs to submit lower bids for the land sites and lower their upfront costs.

– CNA/ck