Increased supply of industrial sites is available under the GLS 2H2023 program

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The Ministry of Trade and Industry (MTI) has announced on the 23rd of June released that it will announce the Industrial Government Land Sales (IGLS) program for the second quarter in the calendar year. The programme consists of five sites that are on the Confirmed List that have the site size of 6.43 square hectares (692,119 sq feet) as well as three sites on the Reserve List totalling 3.38 ha (363,820 sq feet). Together the sites are spread across an area totalling 9.81 acres (1.06 million square feet).

The site area included in the Confirmed List constitutes an 63.2% bump up from the 3.94 ha that was launched across four sites during the first half of this year says Lee Sze Teck, senior director of research at Huttons Asia. “This is the largest amount in industrial property since the 2H2014 period, when 9.5 acres of land for industrial development was leased,” he adds.

The five sites in the Confirmed List are in Tampines North Drive 5, Tampines North Drive 4, Tuas Bay Drive, Gambas Way as well as Tuas Link Close. The sites that are listed on the Reserve List include two along Jalan Papan and one along Tuas Road. The two sites are Plot 3 Jalan Papan and the site located on Tuas Road – are currently listed on the Reserve List.

Sites that are listed on the Reserve List will be put on the market for sale in the event that an interested party files an application that includes the offer for a purchase price acceptable to the government, or if more than one person offers minimum purchase prices that are that are close to the reserve value within an acceptable time.

The rise in the supply of industrial land comes as rents and prices continue to rise in spite of a less optimistic outlook for Singapore’s export and manufacturing sectors. In the 1Q2023, JTC data showed industrial property prices increased by 1.5% q-o-q, while industrial rents increased to 2.8% q-o-q. “Prices and rents for industrial spaces have risen above the low outlook and increased over the last several months” declares Huttons’ Lee.

To this end He believes that the government is likely to increase the supply of industrial land to help limit the growth in rental and price as well as help companies manage the cost of occupancy. “This could result in slowing down the industrial property market about two to three years from now,” he opines.