Industrial property sales languish as buyer-seller standoff intensifies

Only one project debuted in Q2.

Data from Colliers showed that sales of strata-titled industrial properties continued to languish in the second quarter of the year, as the weak buying sentiment extended into another quarter.

Preliminary caveat records from the URA REALIS as of 1 July 2015 showed the number of caveats lodged falling from 220 in 1Q 2015 to 206 in 2Q 2015.

Colliers said that by and large, the combination of the Total Debt Servicing Ratio requirement that has crippled buyers’ purchasing power, the ongoing pricing disagreement between buyers and sellers, jitters over an impending interest rate hike and buyers’ anticipation of a future price correction remained among the key factors that weighed down on sales activity during the quarter.

“The poor buying sentiment, coupled with the heightened competition from sellers looking to offload their industrial units in the secondary market, also continued to pose challenges for developers, who were looking for an opportune time to release units in new strata-titled industrial developments for sale in 2Q 2015,” said Tan Boon Leong, Executive Director of Industrial Services.

Consequently, with most developers staying focused on clearing the unsold inventory in already-released projects, only one new strata-titled industrial project made its debut during the quarter.

The 229-unit Proxima@Gambas, which has a 30-year leasehold tenure, saw selected units being released for sale in late June at prices starting from $225 per sq ft.

“It was observed that in the prime freehold conventional industrial property segment, where supply remains limited, most sellers showed the ability to hold on to their pricing expectations during the quarter. This is despite the diminishing pool of prospective buyers,” Tan added.

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