The bustling landscape of industrial property sales continues to thrive, as evidenced by the recent transaction of the Freehold industrial property at 18 Genting Road, nestled within the MacPherson industrial estate, fetching an impressive sum of S$12 million. This notable development was disclosed by Savills Singapore.
To put this sale into perspective, it equates to a commendable rate of S$840 per square foot per plot ratio (psf ppr). Savills noted that the selling price closely aligns with the guide price, although specific details were not disclosed.
Positioned in District 13, this prime land plot spans an area of 5,700 square feet (sq ft) and houses a five-story building boasting a generous gross floor area of 11,749 sq ft. Interestingly, the identity of the seller remains a well-kept secret. However, insider information reveals that the buyer is a local company with intentions to utilize the property for its own purposes, aligning with the zoning for clean or light industry use.
This transaction is part of a broader trend in the industrial investment market, which has recently witnessed a flurry of activity, with several freehold assets changing hands or being put up for sale over the past few months.
For instance, the top floor of the Freehold Amtech Building in the Sin Ming area was made available earlier in the same week for S$15.4 million, translating to S$1,150 psf on strata area. In a noteworthy sale from November the previous year, a freehold property at 50 Playfair Road exchanged hands for a staggering S$81.18 million, equating to a rate of S$895 psf ppr. The buyer, while remaining undisclosed, has plans to establish a food factory on the site.
About 2C Mandai Estate Collective Sales
Two months prior, Cushman & Wakefield had offered a freehold development site for a food factory at S$90 million, inclusive of land betterment charges amounting to S$3.4 million. This deal calculated to approximately S$738 psf ppr, as per Cushman & Wakefield. The development, situated at 2C Mandai Estate, occupies land spanning about 50,630 sq ft, with a gross plot ratio of 2.5 and a potential gross floor area of 126,575 sq ft.
About 10 Mandai Estate Collective Sales
Back in 2023, Smartisan Development has made a significant acquisition, securing two adjacent freehold industrial sites located at 10 and 12 Mandai Estate for a substantial sum of $100 million. This strategic move marks a significant development in Singapore’s property landscape.
The purchase price, which matches the asking price, translates to an impressive land rate of $657 per square foot per plot ratio (psf ppr), inclusive of the land betterment charge. Smartisan Development’s ambitious plan is to transform these industrial sites into a state-of-the-art freehold food factory facility, showcasing their commitment to innovation and excellence in the industrial sector.
Opportunity in Singapore Industrial Property
Despite investors’ continued interest in the market, characterized by significant growth, it’s important to note that rental and price escalation are expected to stabilize. This is attributed to the global economic slowdown and the manufacturing sector’s vulnerability.
According to the JTC All Industrial index, rents rose by 2% in Q3 2023, a slight dip from the 2.1% growth witnessed in Q2 2023. Similarly, prices of strata industrial space increased by 1.4% in Q3, a modest decline from the 1.5% growth observed in the preceding quarter.
As we look ahead to 2024, Savills projects a flat growth trajectory for multiple-user factories in terms of rents, while the warehouse segment may experience a growth rate ranging from 0 to 3%. Multiple-user factory space prices are forecasted to rise by 4% this year, with warehouse prices potentially seeing a 5% uptick.
In this dynamic landscape, the industrial property sector continues to evolve, offering opportunities for both investors and end-users alike.