SINGAPORE INDUSTRIAL PROPERTY MARKET OVERVIEW
1.4 ECONOMIC OUTLOOK
The MTI announced on 25 November 2014 that the Singapore economy is expected to expand by 2% to 4% in
2015, supported by externally-oriented sectors like manufacturing, wholesale trade and finance & insurance.
Some domestically-oriented sectors such as business services are also expected to remain resilient, but labour
constraints may weigh down the growth of labour-intensive sectors like construction, retail and food services.
MTI’s 2015 forecast also factored in the lingering global downside risks such as the uncertainties over when, and
the pace at which the United States (“US”) Federal Reserve will raise the Federal Funds rate, the possibility of a
global Ebola outbreak, as well as the expected uneven performance across the major economies. For example,
the US and Eurozone economics are expected to improve in 2015, but Japan’s economy is expected to remain
sluggish and China’s growth could ease further.
In line with MTI’s forecast, the Economist Intelligence Unit (“EIU”) expected Singapore’s real GDP to grow by 3.1%
in 2015. For 2016 to 2018, the EIU forecasts real GDP growths of 3.2% to 4.1%. Industrial production is expected
to grow by between 6.3% and 6.7% from 2015 to 2018.
Selected Economic Indicator Forecasts
Indicator/ Year
2015F
2016F**
2017F**
2018F**
Real GDP
2.0% to 4.0%*
3.2%
3.6%
4.1%
Industrial Production
6.4%**
6.3%
6.5%
6.7%
* Ministry of Trade & Industry (25 November 2014)
** Economist Intelligence Unit (22 January 2015)
Source: MTI/Economist Intelligence Unit
Additionally, Singapore’s total FAI (of which manufacturing FAI is a component) is expected to fall from S$11.8
billion in 2014, to about S$9.0-11.0 billion in 2015. This took into account the more uncertain global economic
outlook and EDB’s sharper focus on attracting projects that aligned with Singapore’s stage of economic
development, manpower policies and planned international commitments on carbon emissions.
2.0 GOVERNMENT POLICIES AND MEASURES AFFECTING THE SINGAPORE INDUSTRIAL PROPERTY MARKET
2.1 INDUSTRIAL GOVERNMENT LAND SALES ("IGLS") PROGRAMME
The Government manages the supply of industrial land through its bi-annual Industrial Government Land Sales
(“IGLS”) Programme to ensure the provision of affordable industrial space for industrialists. Given the ample
pipeline supply of industrial space, the Government continued to scale back its IGLS programme for 1H 2015.
As announced by the MTI on 30 December 2014, the 1H 2015 IGLS Programme will offer 14 sites with a combined
land area of 14.08 ha, less than the 15 sites totalling 18.8 ha offered for 2H 2014. The nine sites on the Confirmed
List
2
and five sites on the Reserve List
3
for 1H 2015 can potentially yield about 1.1 million sq ft and 1.5 million sq ft
of industrial space, respectively.
The Government also continued to cap the maximum land tenure of industrial sites under the 1H 2015 IGLS
programme at 30 years, and provided smaller sites with shorter land tenure of about 20 years for industrialists
to develop their own customised land-based facilities.
2 Under the Confirmed List, the Government will release a site for sale by tender at a pre-determined date, without the need for the site to be triggered
for sale.
3 Under the Reserve List, the Government will only release a site for sale if an interested party submits an application for the site to be put up for tender
with an offer of a minimum purchase price acceptable to the Government. The successful applicant must undertake to submit a bid for the site in
the ensuing tender at or above the minimum price offered in the application.
CAMBRIDGE INDUSTRIAL TRUST | ANNUAL REPORT 2014
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