By Mr Desmond Sim, Head of Research, Southeast Asia
In light of the challenging economic outlook, the government is easing the supply of industrial land. The Confirmed List of the 2H2019 Industrial Government Land Sales Programme showed a 35.2% cutback in potential supply to 0.58 mil sq ft from the 1H 2019 IGLS programme. This is the lowest since the last peak at 1H 2013 (3.04 mil sq ft), reflecting the authorities’ consistent efforts to trim supply. Similarly, the Reserve List showed a 15.3% reduction in potential supply to 1.55 mil sq ft from the 1H 2019 IGLS programme.
Although the number of sites on the Confirmed List and Reserve List were reduced to four and six sites, respectively, there is a clear diverse array of sites in terms of geographical spread. The reduction aims to help rebalance the demand and supply situation in the industrial market. The vacancy rate of both factories and warehouses as at Q1 2019 stands at 10.5%, which represents approximately 52.97 mil sq ft of vacant stock.
Should any industrialists seek beyond the Confirmed List, the sites under the Reserve List still presents good feasible options. At the same time, some industrialists can turn to existing options, from public or private developments.
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