Chart of the Day: Prices of upper-storey factories, warehouses slipped 0.1% to $477psf

What could this imply?

According to Savills, sales of industrial properties fell for the third consecutive quarter in Q1/2014. The total number of strata factory and warehouse caveats lodged in the first quarter of 2014 was only 393, a decline of 35.7% quarter-on-quarter (QoQ) and 50.1% YoY.

The quarterly decline is seasonal, whereas the YoY decline is largely due to the implementation of the total debt servicing ratio (TDSR) in late June 2013.

Here's more from Savills:

We also noted that 60-year leasehold properties were more actively traded compared with 30-year leasehold and freehold units.

Prices of industrial properties tracked by Savills were relatively stagnant in Q1/2014 despite the decline in sales volumes. Prices of 60-year leasehold properties slipped 0.1% QoQ from S$477 to S$476 per sq ft, while freehold properties remained flat at S$681 per sq ft in Q1/2014.

However, 30-year leasehold properties managed to climb by another 1.3% QoQ. The fact that prices did not decline in step with transaction volumes indicates a resistance from developers and owners against the impact of the surge in supply in 2014, which is expected to be 34.7 million sq ft GFA.

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