According to a research report, Credit Suisse, a leading Swiss Banking giant, is concerned about the industry properties segment in Singapore. In particular, it has expressed the concern about how the prices of industrial properties in Singapore has been catching up, with rents and prices increases at an alarming rate this quarter.
Part of the reason of the increase in the prices of industrial properties is the introduction of stamp duties on private residential properties. This has resulted in many real estate buyers flocking to the industry segment where the stamp duties are not as high as compared to private residential properties. Credit Suisse has expressed that the industrial property segment is far too ahead in terms of the price and the segment should see some negative news such as a drop in prices or rents in the next few quarters. The increase in prices of the industrial sector has also prompt the new owners to increase their rent thereby resulting in the upscale in industrial rent as a whole.
Industrial Properties in Singapore
Also, Credit Suisse note that the past few quarters of buying industrial properties space has caused a high vacany rate in industrial parks. Particularly, 21.7 percent of these spaces remain unrented. Also, Credit Suisse remains pessimistic about this sector due to the fact that more industrial parks are due for completion soon and this will put more competition for tenants in the already saturated property segment.
Real estate buyers in Singapore has been looking for segments in the real estate sector to park their money for investment. The general increase in prices has caused many buyers to be restricted on their purchase due to the TDSR. However, Riverbank new launch in Sengkang West Way will be a good alternative. It is in the traiditional private residential sector with prices that are very affordable as the developer bid for the land way back where the land prices was cheap. Riverbank new launch should be ready to launch in 1st Quarter 2014. The developer behind Riverbank is UOL Group Limited.