Brace yourselves for higher industrial property price hikes

Prices have already surged 26% in 4Q12.

According to Knight Frank, in 4Q 2012, the All Industrial Price Index dipped 0.7 per cent on a q-o-q basis for the first time since 3Q 2009. The drop in price index was primarily due to the drop in median transacted prices of new strata units sold in this quarter.

On a year-on-year (y-o-y) basis, prices have increased 25.8 per cent in 4Q 2012. The several rounds of government cooling measures on the residential market have steered investors’ interest from residential segment to the industrial sector since early 2012.

Specifically, the Additional Buyers’ Stamp Duty of 10 per cent on foreign homebuyers that took effect from 8 December 2011 could have had a greater effect in diverting investors to industrial property and have contributed in part to the higher increase in overall industrial prices.

New sale projects with better building specifications such as Oxley Bizhub and Oxley Bizhub 2 have also fuelled higher prices.

Rentals have also continued to increase in 4Q 2012. The URA All Industrial Rental Index rose 10.1 per cent in 4Q 2012 y-o-y and 3.9 per cent q-o-q, compared to 1.2 per cent q-o-q in 3Q 2012.

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