Property prices moderate in 1996

Property prices moderate in 1996

SINGAPORE (AFP): Singapore's industrial property prices, seen
as the highest in Southeast Asia, should moderate in 1996 in line
with government moves to ensure the city state remains
competitive, analysts said yesterday.

But office rentals and prices in land-starved Singapore are
likely to stay firm, they said.

Industrial property capital values here have surged some 60
percent over the last two years while prime office rentals too
have held up.

"We do expect industrial property prices to moderate a little
but partly because of the government's stated intention to keep
the international competitiveness of Singapore," Tay Kay Poh of
Knight Frank property consultants told AFP.

Tay said the government had shown concern over rising
industrial property prices which rose by about 40 percent this
year.

Facing a buoyant manufacturing sector, the darling of the
Singapore economy, the government released about 50 hectares (123
acres) of state land for industrial use this year and is to
release a like amount of land next year.

"I think the impact of all this is not to really bring down
prices but simply moderate them because demand has been strong.
But it will take a while for the tightness to be released," Tay
said.

State-owned Jurong Town Corp., which prepares industrial land
for use in Singapore, said in a statement over the weekend that
demand for industrial land has been "exceptionally strong."

Based on latest statistics available, net allocation of
industrial land more than doubled from the previous year to 220
hectares (543 acres) in 1994, it said.

Spencer Neo of Jones Lang Wootton was reported saying by The
Business Times yesterday that rapid growth in capital values of
industrial land in Singapore in 1995 was "above all, a reflection
of the amount of investor funds circulating in the market seeking
investment opportunities."

Meanwhile, office rentals and prices in Singapore would edge
upwards next year but a charge-up could begin in 1997 when new
supply looks set to fall sharply, market watchers were reported
as saying by The Straits Times.

"We expect rentals of prime office space to hold at their
current levels of S$9 to S$10 (US$6.42 to $7.14) per square foot
for the next 12 months before charging up again to S$ 12 per
square foot sometime in early or mid-1997, and especially in
1998," Leong Chi Meng of Vickers Ballas said.

Analysts expected demand to remain firmly in line with
expected growth of employment in three sectors -- commerce,
transport and communication and finance and business -- and as
multinationals continued to expand in Singapore.

"Most people agree that office market vacancy rates are still
very low in prime areas and rentals have held up very well. There
actually isn't new space coming on stream in the central business
district areas in the next 12 months or so," Tay said.