With the influence of industrial revitalisation in Macau, total transaction amount of the industrial property reached around MOP 4.7 billion last year, a growth of 72% from 2013. Data from the Statistics and Census Service (DSEC) shows the average selling price per square foot in the industrial market increased from MOP 1,115 in 2011 to MOP 5,040 in 2014, a 3.5 times appreciation in 3 years.
Meanwhile, growth in gambling revenue pushed up tourism development in Macau. Industrial spaces were taken up by tourism-related businesses for storage of goods and materials. An increasing number of SMEs moved from office to industrial areas, where they could save half of their total costs (average office price was MOP 11,250 psf. in 2014).
As the special stamp duty against property speculation does not apply to the purchase of industrial properties, investors shift their capital from the residential and commercial markets to industrial one. However, a decline in gambling revenue in 2014 and the 24/7 immigration policy in place may cool down market sentiment in 2015. SMEs are expected to locate their factories and godowns to Zhuhai, China, and Macau’s industrial market would be on softening demand.
However, the Macau SAR government is planning to purchase factories to extend community services run by social enterprises. This move may help support the prices of industrial properties.
As a result of the slumping gambling revenue, only 37 transactions of industrial properties were recorded in the first five months of 2015. These amounted to around MOP 583 million, a slight drop compared to last year’s figure. In 2015/Q1, the average transaction price psm was MOP 56,363, up 2.3% y-o-y and 21% q-o-q. Currently, the rents of revitalised industrial buildings have increased by around 30%. The increment is expected to support prices in the second half of 2015, but the transaction volumes would remain stable.