URA Woodlands Site Available

Source : The Business Times, April 22, 2009

THE Urban Redevelopment Authority yesterday released detailed sale conditions for an industrial site at Woodlands.

Developers interested in buying the site can now apply to URA for it to be put up for tender. The plot, which is being offered from the reserve list, is at the junction of Woodlands Industrial Park E5 and Woodlands Avenue 4.

The site area is 2.5 ha and the gross plot ratio is 2.5. The lease period is 60 years. The site is being made available despite the depressed global economy and trade continuing to put downward pressure on the rents and capital values of industrial properties.

The investment market for industrial properties is not faring any better, with only one transaction above $5 million in Q1 this year, data from CB Richard Ellis (CBRE) shows. Against this background, demand for the Woodlands site is unlikely to be strong, analysts reckon.

'In such as weak market, even if there is interest, the price will not be very high,' said Knight Frank's head of industrial business space Lim Kien Kim. Bernard Goh, director for industrial and logistics services at CBRE, said: 'If there is a bid, the price is likely to be below expectations because of how the market is.'

Traditionally, demand for industrial properties in Woodlands has been weak, said Mr Lim. He expects bids in the range of $25-30 per sq ft per plot ratio.

Industrial rents are falling due to a slowdown in demand for industrial space. Consolidation and downsizing is the order of the day, and expansion is the exception rather than the norm, CBRE said in its Q1 2009 industrial report.

According to CBRE, monthly rent for hi-tech space fell 3.3 per cent quarter on quarter to $2.90 psf in Q1. Average monthly rents for ground and upper-floor factory units fell $0.10 psf quarter-on-quarter to $1.45 psf and $1.20 psf respectively.