INDEPENDENT
MARKET STUDY
By DTZ
1.0
ECONOMIC OVERVIEW
Singapore’s economy expanded at a moderate pace in 2014
Based on advance estimates from the MTI, Singapore’s economy grew by 2.8% in 2014, down from
3.9% in 2013. This is partly due to the mixed performance of the global economy – while the US
economy improved steadily in 2014, the pace of recovery in the Eurozone was lacklustre. Domestically,
Singapore’s growth was hindered by the ongoing labour market pressures and weak productivity.
On a positive note, manufacturing performance picked up, with the sector growing by 2.4% in 2014,
up from 1.7% in 2013. Nonetheless, the sector’s growth was uneven as performance in transport
engineering, electronics and general manufacturing clusters was relatively patchy. Meanwhile, inflation
eased from 2.4% in 2013 to 1.0% in 2014, below the average annual inflation rate from 2004 to
2013 (2.8%).
Economic growth expected to remain modest at 2% to 4% in 2015
The government expects gradual improvements in externally-oriented industries e.g., electronics,
particularly those which are highly driven by the US economy. However, with headwinds in other
major economies, the overall outlook for the global economy is mixed. In particular, the slowdown in
Mainland China and protracted weakness in the Eurozone are expected to hamper trade and transport
and storage activities. The downside risks to the recent sharp decline in oil prices and expected rise
in interest rates in H2 2015 are expected to weigh on Singapore’s growth prospects. Meanwhile,
the ongoing restructuring towards productivity-led growth in Singapore is also expected to limit
economic upside.
Based on the abovementioned considerations, Singapore’s economy is expected to continue at a
moderate level in 2015, with GDP growth forecasted to come in at 2% to 4% in 2015. Meanwhile,
headline inflation is projected by the MAS at -0.5% to 0.5% in 2015 as imported inflationary pressures
are receding, amid expectations that global oil prices are likely to stay relatively subdued in the year.
2.0
KEY GOVERNMENT POLICIES AND MEASURES IN 2014
JTC’s revised subletting policy, coupled with the industrial property-related government
measures in 2013, have weighed on the overall industrial market
The government has been implementing various policies and measures for industrial properties since
2013 e.g., the imposition of Sellers’ Stamp Duty on industrial properties and the tightening of assignment
of lease policy for industrial properties on JTC-leased sites.
The government continued to be active in ensuring Singapore’s manufacturing competitiveness and
managing industrialists’ real estate needs. JTC adjusted the maximum allowable sublet quantum for its
lessees from 50% to 30% of GFA, with effect from 1 October 2014, while existing lessees and tenants
are given till end 2017 to adjust to this new ruling (Table 2.1).
The Manager commissioned DTZ to prepare a report on the market outlook. While the Manager believes that
the information and data are reliable, the Manager cannot ensure the accuracy of the information or data and
the Manager has not independently verified such information and data. All the information and
data presented in this section has been provided by DTZ.
SABANA REIT
|
ANNUAL REPORT 2014
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