New industrial land supply aimed at meeting needs of end-users

SINGAPORE — While the Government has reduced the total supply of industrial space available in its land sales programme for the second half of the year, it continues to focus on meeting the demand from end-users by offering a greater proportion of smaller parcels with shorter tenures.

Fifteen sites — nine on the confirmed list and six on reserve — totalling 18.87 hectares have been launched under the Industrial Government Land Sales (IGLS) programme for the second half of this year, the Ministry of Trade and Industry (MTI) said yesterday in a statement. This is lower than the 20.42 ha of land that was made available in the first six months of this year.

However, more parcels have been placed under the latest Confirmed List, even though the total site area is similar to that of the first half, market watchers noted.

“The supply under the Confirmed List is steady — 12.07 ha in the first half and now 12.06 ha in the second half, but the composition has changed because there are more sites this time round. I think the Government wants to cater to the industrialists who want to build their own premises,” said Mr Tan Boon Leong, Colliers International executive director of industrial services.

Sites under the Confirmed List are put up for sale regardless of market interest, while those on the Reserve List are triggered for public tender only if a developer makes an acceptable opening offer.

One of the Confirmed List sites targeted for multiple-user development — a 1.63-ha plot of land on Penjuru Road — will have a shorter tenure of 20 years to meet the needs of industrialists at affordable prices, the MTI said.

CBRE head of research Desmond Sim said besides keeping industrial land prices in check, offering land on shorter tenures is also the Government’s way of responding to changing market dynamics.

“More and more firms are becoming less land-intensive, so it’s a sign that the Government has reviewed the requirements to match demand. At the same time, having smaller sites with shorter tenures also prevent people from overbidding for something that they do not necessarily require, so in a way occupancy cost is reduced,” said Mr Sim.

“This also gives businesses the flexibility to expand or move to another location. They won’t be tied down.”

Out of the Confirmed List sites on offer, Mr Tan said he expects a 0.5-ha plot of land on Tampines Road to be well received.

“I think this is the first plot that they’re putting up at this location. I’ve not seen anything here for a long time, so anyone who wins (Plot 8) will have first-mover advantage. And for the same reason I think Plot 9 Tampines Road from the Reserve List has the potential to be triggered for sale,” he said.