Singapore Shortens Industrial Land Tenures to Cut Costs
by Ernie B. Calucag
Singapore will shorten the tenure of industrial land sold by the state to help reduce the upfront cost of building factories and warehouses, the Ministry of Trade and Industry (MTI) said on Monday.
Under its Industrial Government Land Sales (IGLS) Programme for the second half of this year, the tenure for all recommended sites in the IGLS programme will be cut to a maximum term of 30 years, down from 60 years.
“The tenure reduction increases the government’s flexibility for land redevelopment and would help to make industrial property more affordable for industrialists,” MTI said in a statement.
The tenure for sites that have not been sold will also be capped at 30 years, the ministry added.
Singapore’s industrial land sales programme for July-December will total 23.72 hectares, similar to what was released in the first half. For all of 2012, the amount of industrial land made available will total 47.69 hectares, about 1.4 times more than in 2011.
The site area comprises of 16 sites in the Confirmed List and three sites in the Reserve List.
Similar to the first half of 2012, more sites of smaller size and shorter tenure will be released.
“In addition, the new set of requirements for all Business 1 and Business 2 sites in the IGLS programme effective from 1 January 2012 will continue to ensure that the new industrial space built by developers on IGLS parcels can better meet the industrialists’ needs for ready-built industrial space,” added MTI.
Prices of multiple-user factories rose by 7.2 per cent in the first quarter from the previous three months, while that of multiple-user warehouses grew 8.8 per cent, according to data from the Urban Redevelopment Authority.
Going forward, the Singapore government expects an annual supply of 500,000 sq m of multiple-user factory space to be completed in 2012 and 2013. This is about three times the average annual supply for the past five years and will ensure that there is sufficient supply of affordable factory space for industrialists.
“The government continues to closely monitor the industrial property market and when necessary, introduce additional measures to meet demand, moderate prices and safeguard the space released for industrial activities,” MTI said.
Since March 2012, developers are required to provide accurate information on the type of development and allowable use of the industrial property in the option to purchase, and the sale and purchase agreement. This is to ensure that industrial land is safeguarded for industrial activities.