Month: February 2025

| Industrial property prices and rents in Singapore are expected to moderate this year as supply increases and demand weakens, according to a report by Colliers in February. The firm predicts a slow growth rate of 0% to 2% for both overall annual industrial rental and prices in 2025, compared to the 3.5% growth seen last year. The latest JTC data for Q4 2024 showed a market that is losing momentum, with a 17th consecutive quarter of growth for the All Industrial rental index, but at a slower pace of 0.5% quarter-on-quarter (q-o-q), and bringing total growth for the year to 3.5%. This is a significant decline from the 8.9% rental growth reported in 2023. The price index also grew 0.5% q-o-q in Q4 2024, lower than the 1.2% growth in the previous quarter. In 2024, prices rose 2.1%, which is less than half of 5.1% increase in 2022.According to Colliers, the supply of industrial space is expected to increase this year, with 2.5 times more supply than last year entering the market, before tapering off from 2026 onwards. This surge in supply has created an imbalance between supply and demand in certain segments of the market, leading to slower precommitments for upcoming supply and lower occupancy for completed projects. The firm points to the higher supply, combined with caution among occupiers due to high interest rates and rising operating costs, as the cause of the slower rental growth. Additionally, global trade protectionism has caused uncertainty in the market, which may affect business confidence and investment decisions.On the other hand, Colliers believes that the semiconductor, logistics and advanced manufacturing sectors will continue to drive demand for industrial space. It also expects to see a gradual ramp-up in industrial leasing activities as policies become clearer and market sentiments improve. This will be supported by the upturn in the chip cycle. In the short term, with the expected increase in supply and the projected moderation in rents, tenants may benefit from having more options in the market. The firm says that this could be a good year for businesses as newer industrial developments with modern specifications may encourage relocations from older, ageing manufacturing spaces. Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers, advises that current listings for industrial properties be checked and past transactions be compared in terms of rental and sale prices for a better understanding of the market trends.

A recent research report by Colliers has projected a moderation in Singapore’s industrial property prices and rents this year, due to a combination of higher supply and weaker demand. The firm predicts a growth rate of 0% to 2% in both overall annual rental and price levels for 2025, compared to the 3.5% increase seen in the previous year.

According to Colliers, the latest data from JTC for the fourth quarter of 2024 indicates a market that is “losing steam”. While the All Industrial rental index recorded a 17th consecutive quarter of growth, it only rose by 0.5% quarter-on-quarter (q-o-q) and the total growth for the year was 3.5%, a significant decline from the 8.9% growth in 2023. The price index also saw a q-o-q increase of 0.5% in the fourth quarter, down from 1.2% in the previous quarter. This led to a 2.1% overall increase in industrial property prices last year, less than half of the 5.1% growth seen in 2022.

The report attributes the muted outlook to a surge in industrial space supply this year, which is expected to be 2.5 times higher compared to the previous year. This increase has caused an imbalance between supply and demand, resulting in slower precommitments for upcoming supply and lower occupancy for completed projects. The higher supply, coupled with cautiousness among occupiers due to high interest rates and escalating operating expenses, is expected to continue dampening rental growth. In addition, global trade protectionism has introduced uncertainty to the market, which could impact business confidence and investment decisions.

However, Colliers remains optimistic about the demand for industrial space, particularly in the semiconductors, logistics, and advanced manufacturing sectors. The firm also anticipates a gradual ramp-up in industrial leasing activities as policies become clearer and market sentiments improve, supported by the ongoing upturn in the chip cycle. In the short term, with the expected increase in supply and the projected moderation in rents, this could be a favorable year for tenants with more options available in the market. New industrial developments with modern specifications may also attract businesses to relocate from older, ageing manufacturing spaces.

Nicolas Menville, executive director and head of Singapore-based industrial clients for Colliers, advises individuals to check current listings and compare past transactions in terms of rental and sale prices to better understand market trends.…

The Tan Boon Liat Building, a well-known industrial property situated at 315 Outram Road, is being put up for collective sale through a public tender process at a reserve price of $1.15 billion. The freehold site, which is conveniently located next to the upcoming Havelock MRT Station on the new Thomson-East Coast Line (TEL), comprises two separate land plots that are designated for “Business 1” use and have a combined site area of approximately 175,655 square feet.

The iconic 15-storey building is currently home to several furniture and home décor stores, making it a popular destination for shoppers and businesses alike. The property’s advisor and marketing agent, Cushman & Wakefield, has revealed that the Urban Redevelopment Authority (URA) has issued an Outline Planning Advice on January 22, recommending that the site be rezoned to “Residential with Commercial at 1st storey” with a plot ratio of 4.9. This represents a significant increase from the current plot ratio of 3.1 and would allow for a 50% increase in the total gross floor area (GFA) of the site, according to Cushman & Wakefield.

The URA has also suggested that a few remnant state land plots be amalgamated into the main plot, subject to the relevant authorities’ approval. These land plots are estimated to measure about 20,451 square feet, and together with the bonus GFA entitlement, could potentially result in a total GFA of over 1.06 million square feet. Furthermore, the first storey will be able to accommodate a commercial GFA of up to around 16,146 square feet.

In terms of residential allocation, a minimum GFA of approximately 161,459 square feet must be reserved for Serviced Apartments II (SA2), where a minimum stay of three months is required. The allowable heights for the new development range from 130m to 180m.

Based on the reserve price, which includes land betterment charges on rezoning, the estimated premium payable on the remnant state land, and the 10% bonus GFA applicable to the residential portion, the land rate is estimated to be around $1,888 per square foot per plot ratio.

Recent industrial sales transactions at Tan Boon Liat Building (Source: EdgeProp Buddy)

Christina Sim, senior director of capital markets at Cushman & Wakefield, is confident that the site will be attractive to developers due to its freehold tenure and prime location on the TEL, which is likely to be a major draw for homebuyers. She also notes that the absence of Additional Buyer’s Stamp Duty (ABSD) will be a significant advantage for potential buyers, as the original site has a “Business 1” zoning.

The public tender for the site will close on March 18 at 3pm.…

The most luxurious penthouse at Park Nova has recently been sold, surpassing the previous record price for the development. The five-bedroom unit, located on the 20th floor and spanning 5,899 sq ft, was sold by the developer for an impressive $38.888 million, or $6,593 psf, as per a caveat lodged on Jan 21 on the URA Realis database.

This sale not only sets a new record for the highest price ever recorded for a unit at Park Nova, but also for the highest psf-price based on caveats lodged. The previous records were held by a 4,499 sq ft penthouse that was sold in May 2021 for $26.026 million ($5,784 psf).

The transaction also marks the second-highest psf-price ever registered for a condo unit in Singapore, with the current record holder being a unit at The Marq on Paterson Hill. Back in 2011, a four-bedroom unit on the 20th floor of The Marq, measuring 3,089 sq ft, was sold for $20.54 million ($6,650 psf).

By searching for the latest new launches, one would be able to find out the transaction prices and available units. The Park Nova penthouse that was sold on Jan 21 is believed to be part of a collection of properties linked to a $3 billion money laundering case that has been put up for sale. It was previously reported to have been sold in 2021 for $34.438 million ($5,838 psf).

According to caveats, this is the third unit at Park Nova that the developer has sold within a month. On Jan 17, a four-bedroom apartment measuring 2,906 sq ft on the 19th floor was sold for $16.59 million ($5,708 psf). Prior to that, on Dec 27, a 2,896 sq ft unit on the 18th floor was sold for $15.99 million ($5,522 psf).

The latest sales transactions at Park Nova (Source: EdgeProp Buddy) serve as a testament to the popularity of the 54-unit luxury freehold condo, which is located at the junction of Orchard Boulevard and Tomlinson Road in the prime district of 10. Developed by Shun Tak Holdings from Hong Kong, the development received its temporary occupation permit in November last year. Interested buyers can check out the latest listings for Park Nova properties and ask Buddy for more information. They can also request for the site plan, diagrammatic chart, and project summary of Park Nova condo, as well as compare the price trend of new launch condos versus ECs, the total number of units in Park Nova, and generate a price trend graph for new launch condos in District 10.…

CapitaLand Investment (CLI) is entering the data centre market in Japan with its latest acquisition of a freehold land parcel in Osaka. The development of the data centre, which will entail a total investment of over US$700 million or $944.3 million, marks CLI’s first foray into the country.

The data centre, which will have a power capacity of 50 megawatts (MW), is set to be geared towards supporting artificial intelligence (AI) capabilities. CLI has announced that it plans to integrate energy-saving solutions such as advanced cooling technologies and adopt industry best practices in temperature management.

In line with CLI’s commitment to sustainability, the data centre will also prioritize the use of products with zero ozone depletion potential or with global warming potential (GWP) of less than 100, minimizing its environmental footprint.

According to Manohar Khiatani, senior executive director of CLI and head of the group’s data centre business, the acquisition aligns with CLI’s digitalization investment theme and strengthens its geographical presence in Japan, which is one of its key markets. “CLI’s strong balance sheet gives us the distinct advantage to strategically invest in quality assets such as data centres for our future private funds,” he adds. He also notes that Japan is a Tier 1 data centre market with tremendous growth potential.

With a projected compound annual growth rate (CAGR) of 10%, the Japanese data centre market is expected to reach US$38.7 billion by 2038, up from US$23.8 billion in 2023. Khiatani also highlights that Japan is the largest data centre market in Asia Pacific outside of China, with a capacity of 1.4 gigawatts.

“Our acquisition is well-positioned to capture the demand in Osaka’s established data centre cluster, with major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle already having a presence in the area,” Khiatani states.

Michelle Lee, managing director, private funds (data centre) at CLI, notes that the demand for data centres is set to see double-digit growth, outpacing new supply. She adds that there is strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in this sector.

Since October 2020, CLI has raised approximately US$600 million for its data centre development funds in Asia. According to Lee, this recent acquisition in Japan will help the group build on its momentum and identify “compelling investment pipeline opportunities” for its private fund investors.

With this latest acquisition, CLI has added 23 data centres to its global portfolio in 2021 alone. CapitaLand Group now boasts a total of 27 data centres across Asia and Europe, with a combined power capacity of around 800 MW and assets under management of approximately $6 billion on a completed basis.

On Feb 3, shares in CLI closed 4 cents lower, or 1.63%, down at $2.42.…