Govt curbs on industrial property?

The demand for and prices of property here have remained buoyant despite measures by the Government to cool the sector, sparking concerns that another round of measures may be on the cards.

This time around, however, analysts say the Government may focus on curbing demand for industrial properties.

Prices of industrial property increased 7.2 per cent in the first quarter, according to the Urban Redevelopment Authority’s Property Price Index. Part of the reason for this is a shift in buying sentiment to industrial properties from residential units.

Mr Nicholas Mak, head of research at SLP International, said: “… (Some) property agents who used to sell residential properties in a very aggressive manner are moving into the industrial property market. And they are using those same tactics of very aggressive marketing.”

This has led to calls by property experts for more enforcement on real estate agents to accurately market and advertise industrial premises.

Challenges in regulating the industrial property sector are present though and some analysts observe that it will not be easy to differentiate genuine buyers from speculative investors.

Any government attempt to further detail what a particular industrial space can be used for would also stifle businesses which have to be flexible in a volatile global economy.

Mr Tan Boon Leong, executive director for industrial services (Asia) at Colliers, said: “It is very difficult to impose the same type of cooling measures as we have witnessed in residential properties on the industrial market. This is because industrial activities are important and form the backbone of the economy. Personally, I think the current measures are adequate.”

One of the methods the authorities are using to soften prices is to increase industrial land supply.

Some experts also expect demand to decline naturally amid the current gloomy economy and for industrial rents to stabilise in the current quarter.

Source : Today – 2012 May 22

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