Cooling Measures for Industrial and Commercial Properties

Mr Gan Thiam Poh asked the Minister for National Development whether the Government will consider introducing cooling measures to stabilise the prices of both industrial and commercial properties to prevent excessive price increases that will eventually drive up the business cost in Singapore and cause the decline in competitiveness for businesses in Singapore.

Mr Khaw Boon Wan: Prices of commercial and industrial spaces have risen following the economic recovery from the global financial crisis in 2009. However, the increases for office and shop space have been moderate, with prices as at 3Q 2011 being only slightly higher than their last peak in 2Q 2008. Rentals for the same period were in fact lower than the last peak in 2008.

Prices of industrial space have however risen faster, with prices in the same period reaching 21% above the last peak in 3Q 2008.

To ensure that prices are not out of line with economic fundamentals, the Government has and will continue to release sites via the Government Land Sales Programme to ensure that there is sufficient commercial and industrial space to meet demand over the medium term.

For commercial space, based on committed projects in the pipeline, we will have about 200,000 sqm of new office space and 90,000 sqm of new shop space, per annum over the next five years. This is significantly higher than the historical take-up rate. We will also continue to develop new growth areas outside the CBD, such as Jurong Gateway and Paya Lebar Central, to provide more affordable commercial space for businesses that do not need to be in the CBD.

For industrial land, close to 40ha of industrial land have been made available annually over the last two years. This is about 30% higher than the average amount of land released in the previous two years. For the first half of this year, 24 ha of industrial land will be made available. More affordable sites with smaller sizes and shorter tenure will be released. We have also tightened conditions of sales, such as shortening of the project completion time to ensure a more timely supply of industrial space to meet market demand.

The Government will continue to monitor the commercial and industrial property markets closely to ensure that we remain a competitive location for businesses.

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