INVESTORS and business operators continue to flock to buy industrial property, attracted in part by stronger rental yields than residential properties.
Industrial property has also become a popular alternative since tough cooling measures were introduced for residential property in December last year.
Sales at the newly launched Bartley Biz Centre, with two- and three-storey terrace factories, bear out this trend. More than half the 90 units at the 30-year leasehold industrial centre have already been sold.
Ms Veron Heng, general manager at Soon Hock Group, its developer, said the buyers are mainly locals. At least six buyers each picked up two or more units.
The units are $380 per sq ft on average and range from 1,700 sq ft to 5,300 sq ft in size. Sources said the monthly rental for a 1,700 sq ft unit could top $4,250, while a 5,300 sq ft plot may fetch about $13,250.
For investors, residential properties typically give a rental yield of between 2.5 and 3.5 per cent. But industrial properties tend to be more attractive, fetching between 4 and 8 per cent.
Zoned for B2 development, the centre can be used for heavier industries such as carpentry, engineering or car maintenance, for example. A canteen will be built.
The development, at the corner of Bartley Road East and Kaki Bukit Road 4, is expected to be ready by the end of 2014.
The project will not be affected by new rules concerning some new industrial properties implemented by the Government on Jan 1 this year. This includes a restriction on subdividing the development into strata units within 10 years of the temporary occupation permit being issued.
This applies to selected sites near MRT stations, or as decided by the Government. The new rules aim to quell the rising prices in the sector. Unlike the residential sector, industrial buyers cannot use Central Provident Fund savings for their purchases.
Soon Hock Group won the tender for the Bartley plot in May last year, under the Government Land Sales programme. It is the third landed terrace-style industrial site by the local property developer, Ms Heng said.
Employers can apply to the Urban Redevelopment Authority for permission to convert part of their unit into a dormitory for their own workers.
Explaining why terrace factories are in demand, Ms Heng said: 'We think buyers would like to have the whole property to themselves, and have their own land... it is more exclusive than being in a multi-storey building.'
Weston Global Realty marketing agent Lina Chang added: 'It is also easier for big vehicles... They don't need to go up the ramps like at multi-storey sites and worry about the weight and loading capacities... instead, they can drive straight to the units.'
Mr George Yan, 60, has bought two 4,500 sq ft units there, spending about $3.4 million in total. One is for his engineering business and the other is for investment.
'I like the layout and the size is just nice for my operations. I can have an office on the third floor and do production on the bottom two,' he said. 'There's not a lot of landed industrial sites... it's more independent to have your own unit.'
Property consultant Chua Yang Liang said the site, being in a traditionally industrial area, would be able to 'capture demand from existing operators in the area'.
SLP International Property Consultancy's head of research Nicholas Mak said that average prices for this project are 'on the high side' and the take-up rate may be slower from now.
He noted that while the industrial sector posted strong sales last month, it has slowed down a bit in the past two weeks.