06-06-2012, 03:38 PM
http://www.businesstimes.com.sg/premium/...rial-space
SINGAPORE] A sudden rush for industrial properties and the high value investors are placing on them have alarmed some market players. They wonder if these investors know what they are getting into.
Experts warn that the returns from rentals expected by these investors - many of whom are new to the industrial property market - may not pan out. There is also a huge supply of factory and warehouse space in the pipeline. This may lead to a shortage of tenants and hit rentals in a few years' time.
Rental yields have already come down, as industrial property prices have moved up more than rents, said Chua Chor Hoon, DTZ's head of Asia-Pacific research.
The industrial price index rose 26 per cent in the first quarter from a year ago, outpacing the 10.6 per cent increase in the rental index over the same period.
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Any impact on Industrial Reits? Understand all the Industrial Reits have the tenants locked in for a few years in contracts.
SINGAPORE] A sudden rush for industrial properties and the high value investors are placing on them have alarmed some market players. They wonder if these investors know what they are getting into.
Experts warn that the returns from rentals expected by these investors - many of whom are new to the industrial property market - may not pan out. There is also a huge supply of factory and warehouse space in the pipeline. This may lead to a shortage of tenants and hit rentals in a few years' time.
Rental yields have already come down, as industrial property prices have moved up more than rents, said Chua Chor Hoon, DTZ's head of Asia-Pacific research.
The industrial price index rose 26 per cent in the first quarter from a year ago, outpacing the 10.6 per cent increase in the rental index over the same period.
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Any impact on Industrial Reits? Understand all the Industrial Reits have the tenants locked in for a few years in contracts.