The sites are focused in Jurong East and Tampines
Singapore has made seven industrial sites spanning 6.36 hectares (15.7 acres) eligible to be put on the auction block in the second half of 2022, in what would be the largest half-year government land sale programme for the sector in two years.
Following a boom in demand for manufacturing and logistics facilities in the city-state, JTC Corp, which regulates industrial development in the country, has included four sites with a combined land area of 2.84 hectares in the confirmed list of public tenders that it plans to hold between July and November, the Ministry of Trade and Industry announced on Thursday.
Concentrated in Jurong East and northeastern Singapore’s Tampines area, the four-site confirmed list is supplemented by a reserve set of three land parcels spanning a total of 3.52 hectares. The reserve sites, which include another Jurong East plot and a two-hectare parcel in Tampines, could be added to the roster in case there is sufficient demand.
“In calibrating its latest IGLS programme, the government had likely taken into consideration Singapore’s industrial property market performance in 1Q22, which posted its best quarterly performance in eight years,” said Tan Boon Leong, executive director for logistics and industrial leasing at JLL Singapore.
Nearby Plots Up For Grabs
Together, the seven parcels in the confirmed and reserved lists could yield 1.35 million square feet (125,419 square metres) of gross floor area, which would be 37 percent more than the nearly 1 million square feet of GFA included in the land sale programme in place for the first six months of the year.
JLL’s Tan Boon Leong
Tan said the newly announced batch also marks the largest half-year government land programme since the first half of 2020 when Singapore auctioned off eight sites spanning 7.12 hectares.
The biggest site on the list is a Plot 2 Jalan Papan, a 1.24-hectare plot near the Jurong River in western Singapore’s Jurong East area, which will be launched next month. Just across the street and facing the river is the Plot 5 Jalan Papan, a 0.56 hectare plot which will be put on the market in September.
Located near Avery Lodge dormitory, both sites carry 20-year leasehold tenures and gross plot ratios of 1.4.
During August, JTC will be making available Plot 11a Tampines North Drive 5, a 0.54 hectare plot in Tampines, which has a 30-year land tenure and a gross plot ratio of 2.5.
To allow sufficient land to meet demand without risking oversupply, the land sale programme provides for more square feet on the reserve list than in the confirmed portion of the schedule, which analysts see as a way for the government to hedge its bets.
“While striving to release sufficient land through the IGLS programme to ensure an adequate supply of industrial space to cater to varying business needs, the government likely also considered the ongoing geopolitical tensions and macroeconomic uncertainties,” Tan said, adding that the reserve list will only be triggered once there is demand from developers.
The largest of the three parcels on the reserve list is Plot 7 Tampines North Drive, a 2.03-hectare plot which, if awarded, will provide the winning bidder a fresh 30-year lease and the rights to build a facility of around 538,200 square feet.
JTC also included on the reserve list a 0.72 hectare site in Jalan Papan located directly adjacent to the smaller Jurong East parcel on the confirmed list. That Jalan Papan plot has a 20 year land tenure and a gross plot ratio of 1.4.
Industrial Gains Traction
Singapore is increasing its supply of manufacturing and logistics sites after industrial leasing activity in the country improved in the first three months of the year.
An index of industrial rents in the Lion City rose by 1 percent in the first quarter, compared to the preceding three months, which marked the fasted rate of growth since the third quarter of 2013 when the index clocked in at 4.4 percent, according to the latest data from JLL.
On the investment side, an industrial property price index also rose by 2.1 percent in January-March from the previous quarter to post the sharpest increase since a 3.8 percent surge in the first three months of 2014.
“This (fast price increase) had been underpinned by the robust manufacturing sector which recorded its seventh straight quarter of output expansion in 1Q22,” Tan said.
Singapore has seen a flurry of industrial deals this year including Lian Beng Group’s purchase of an 11-storey industrial building at 31 Harrison Road earlier this month for S$49.25 million ($35.67 million). The property sits next to the developer’s headquarters near the Paya Lebar area.
In April, ESR-REIT launched a S$38.5 million redevelopment of a 1993-vintage industrial complex in Singapore’s Woodland Industrial Estate to the north in an effort to create a more up-to-date facility for a Dutch manufacturing tenant.
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