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C A M B R I D G E I N D U S T R I A L T R U S T
A N N U A L R E P O R T 2 0 1 5
SINGAPORE INDUSTRIAL PROPERTY MARKET OVERVIEW
With the exception of the chemicals cluster which saw its output rise by 3.9% in 2015, annual factory output for
the biomedical manufacturing (-2.6%), electronics (-6.8%), general manufacturing (-2.0%), precision engineering
(-4.1%) and transport engineering (-13.5%) clusters contracted.
Export-oriented sectors such as transport & storage, a key demand driver for warehouse space, also experienced
moderated growth in 2015. Compared to 2.6% growth in 2014, the growth of the transport & storage sector was
flat (0.0%) in 2015. However, wholesale & retail trade grew by 6.1% in 2015, faster than 2.6% in 2014. Growth was
particularly evident in wholesale trade, which provided some respite for the demand of warehouses in 2015.
1.1
Outlook
The MTI expects Singapore’s economy to grow by 1.0% to 3.0% in 2016. With the US’s gradual normalisation of
its monetary policy, growth in the US is expected to strengthen. On the other hand, Mainland China is deepening
its economic restructuring and bracing for a moderate economic growth. As both the US and Mainland China
increase their focus on their domestic markets, export-oriented economies such as Singapore are expected to be
affected. According to the MTI, Singapore’s economic growth is expected to come from domestically-oriented
sectors such as the business services sector.
Meanwhile, the Monetary Authority of Singapore projects inflation to stay between -0.5% and 0.5% in 2016.
According to the Survey of Business Expectations of the Manufacturing Sector for January to June 2016 by the
EDB
1
, a net weighted balance
2
of 29% of manufacturers expects business conditions to worsen, compared to a net
weighted balance of 7% of manufacturers who expect improvement in manufacturing. Subdued global economic
conditions and prolonged weakness in commodity prices are expected to continue to weigh on the manufacturing
sector.
2.0 MAJOR GOVERNMENT POLICIES AND MEASURES
2.1
Major Government Plans, Policies and Initiatives
Policies and measures were introduced since 2013 to ensure a sustainable industrial property market. These
included the imposition of a Sellers’ Stamp Duty (SSD) on industrial properties, Total Debt Servicing Ratio (TDSR)
framework and Assignment Prohibition Period.
To align with Jurong Town Corporation (JTC)’s subletting restrictions implemented in October 2014, the Housing
Development Board (HDB) announced on 30 March 2015 that new and existing tenants of HDB industrial
properties would not be allowed to sublet their industrial properties from 1 June 2015. Tenants with existing
approved subletting arrangements are allowed to renew their subletting agreement up to 31 December 2017.
2.2
Industrial Government Land Sales Programme for H1 2016
The government releases industrial land for sale through the Industrial Government Land Sales (IGLS) Programme
on a bi-annual basis. Since 2014, the government has continued to scale back the IGLS programme to pace
demand. Notably, the total site area of the land parcels released in the H1 2016 Confirmed and Reserve Lists were
12.24 ha, lower compared with that in H2 2015 (14.30 ha). Majority of the sites in the Confirmed List are small (less
than 1.0 ha) and suitable for single-user industrial developments. Three of the six sites were carried over from the
H1 and H2 2015 Confirmed List (Table 2.1).
1 Conducted between December 2015 and January 2016, where 430 manufacturing establishments were surveyed.
2 The net weighted balance is commonly used to reflect the direction and extent of the business sentiments. It is the difference between
the weighted percentage of 'up' responses and the weighted percentage of 'down' responses.
