Due to first-ever industrial seller's stamp duty, says Knight Frank.
Here's more from Knight Frank:
Industrial Property Prices Set to Moderate in the next few quarters: Despite the Government’s earlier release of several industrial land parcels via the Government Land Sales programme to ensure adequate supply of industrial properties for end-users, the impact may be slightly lagged and would materialize only in the coming one to two years when the various properties are completed. On the other hand, the imposition of the SSD, which is considered hefty, is likely to serve its immediate intended effect of curbing speculative activity in the industrial market in the coming 2 quarters.
The possibility of a slowdown of the manufacturing sector in view of lacklustre global economic outlook should not be discounted. The imposition of SSD could potentially prevent a situation where industrialists could suffer from a double whammy of poor production sales and higher business costs stemming from rising property occupancy costs.
The bona-fide industrialists are unlikely to be affected by the SSD as they usually hold their properties for a longer period. For industrialists who are on a look out for business expansions, they are most likely to benefit from this set of cooling measures, as prices of industrial properties are expected to cool arising from the SSD.
Going forward, we expect the price acceleration for new strata factory projects to taper off in the next few quarters as demand softens. We are revising our forecast price appreciation downwards, at 5 to 10 per cent increase for the whole of 2013 from the earlier forecast at 10 to 15 per cent for properties of better tenures, good locations and superior specifications. In addition, industrial rents are likely to moderate as industrialists and end-users resist high rentals in light of rising business costs and slow industrial activities. As for potential industrial property buyers who intended to tap on quick profits, they are likely to adopt a wait-and-see approach.
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