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Industrial land rents & prices to be more competitive |
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01 Mar 2005
Singapore's move to reduce rents and prices cements its reputation as one of the most competitive places in the world for business operations.
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JTC's latest price review affirms Singapore's commitment to lowering business costs, especially in the crucial area of manufacturing-related operations.
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Singapore is upping its competitive business environment ante by slashing posted land rents and prices this year. JTC Corporation (www.jtc.gov.sg), the country's leading provider of industrial space and solutions, announced last year that it would be reducing industrial rents and prices by up to 38 per cent, effective from 1 January 2005.
This measure is an assertive message to foreign investors looking for international business ventures, where space is a vital consideration. JTC's latest price review affirms Singapore's commitment to lowering business costs, especially in the crucial area of manufacturing-related operations. Rental relief measures amounting to S$2.4 billion (US$1.5 billion) have also been meted out since 1998 to help businesses tide over various economic challenges.
Currently, Singapore's industrial landscape is well-equipped to handle a broad spectrum of businesses. There are ready-built multi-storeyed factories, technopreneur centres, start-up incubator centres, business parks and a science and technology hub. Singapore has also established industry-specific nodes such as Biopolis for the biomedical sciences industry, Airport Logistics Park of Singapore for the logistics industry and Kampong Ampat Foodlink for the food and beverage industry.
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New industrial land rents and prices in urban and suburban areas will be reduced by up to 17 per cent
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A boost for manufacturing companies
- Outlying industrial estates to enjoy higher rent and price reductions
- Contracted rents for lessees to be adjusted
According to JTC, new industrial land rents and prices in urban and suburban areas such as Jurong East will be reduced by up to 17 per cent, while outlying estates such as Woodlands East will enjoy even higher rent and price reductions of up to 38 per cent. Posted rents for ready-built facilities in such industrial estates as Loyang and Kaki Bukit will be reduced by up to six per cent, in line with prevailing market rates.
These developments serve as a further boost to major manufacturing companies that have already announced business expansion plans.
In its Singapore Industrial Property Market report, Colliers International pointed out that the economy is expected to grow by between three and five per cent in 2005. According to the report: "Against such a backdrop, many manufacturing companies are expected to expand their businesses. At the same time, we are also likely to see more new manufacturing firms being set up. Together, they will strengthen the demand for industrial space in Singapore."
JTC will also adjust contracted rents for lessees by an average of 20 per cent. Around 4,000 JTC lessees will benefit from this. Similarly, Housing & Development Board (www.hdb.gov.sg) will tweak its contracted rents for industrial land leases that fall under its management, and about 85 per cent of its lessees will stand to gain from this.
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Reduced operational costs for offices
- Survey lists Singapore as one of the cheapest places worldwide for office space
- New building projects such as One Raffles Place to draw companies to Singapore's Central Business District
International property consultant DTZ Debenham Tie Leung recently released its eighth annual Global Office Occupancy Costs Survey 2005. The globally recognised survey serves as a guide to accommodation costs in major office locations, with rankings based on total occupancy costs per workstation. "Occupancy cost" refers to the average total cost of leasing office spaces of 10,000 sq ft or more within a business district.
With ranking No. 1 considered as the most expensive location, Singapore fared well with its No. 93 position out of the survey's 113 prime business districts in 44 countries worldwide.
Not surprisingly, non-manufacturing companies have also announced major leasing plans in Singapore. For example, financial giants ABN AMRO (Netherlands, www.abnamro.com) and Deutsche Bank (Germany, www.db.com) have committed to lease 160,000 sq ft and 150,000 sq ft of office space respectively at One Raffles Quay. With an expected completion date of 2006, One Raffles Quay is located in the middle of Singapore's Central Business District and will offer some 1.3 million sq ft of prime office space.
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