Is the Industrial market still a Good Investment for Investors during COVID 19?


Developer sentiment has been dampened significantly by the latest government's announcement of new cooling measures, according to a survey conducted by National University of S'pore (NUS) and Real Estate Developers' Association of S'pore (Redas).  

Even though the outlook for prime residential and suburban residential sectors were hardest hit, while office, business park/hi-tech space and hotel/services apartment were relatively unaffected. The Real Estate Sentiment Index (RESI) is a derived indicator of overall market sentiment, and comprises a Current Sentiment Index and a Future Sentiment Index.

The Current Sentiment Index, which measures respondents' view of market conditions in the past six months, was revised downward from 6.7 to 3.9 after the latest round of cooling measures were revealed on Jul 6. The Future Sentiment Index, which measures expectations for the next six months, fell from 6.4 to 4.0.

The office, business park/hi-tech space and hotel/serviced apartment sectors were the only sectors that recorded positive sentiments. The latest property cooling measures will cause a "slowdown for the residential en bloc market in the near term", says Tricia Song, Colliers International head of research for Singapore. Commercial and industrial property "could pick up the slack" for the rest of the year, she says.

Higher demand for the commercial and industrial segments will come from "healthy commercial properties deal pipelines and rising interest from real estate investment trusts and institutional investors for industrial assets", Song adds. Sales of industrial properties jumped 295% y-o-y to $797.4 million in year 2018, due to strong private investment sales which accounted for 95.7% of total sales volume in the industrial sector.

"As industrial rents and prices are expected to bottom out and stabilize, we notice a growing institutional interest to acquire more industrial spaces, especially in niche sectors such as data centers, hi-spec facilities and modern ramp-up logistics buildings," says Song.

The Food Concept@Pandan is one example of such concept where it can be used for food manufacturing. The Only Freehold tenure ramp-up logistics building with approved use of multi user food factory in a general industrial building. Being near to the diverse food industries nearby and upcoming 2nd CBD in S'pore (Jurong Lake District), the Food Concept@Pandan is definitely a plus point for investors. What makes this an excellent investment opportunity is definitely because of NO ABSD & TDSR for investing in industrial buildings. 

Every individual's portfolio is different. Contact me for discussion on whether you should invest in the Industrial market, or find out on how to tap into present market opportunity: