Generally speaking, the sales of industrial units in Macau are attractive to investors and end users. Not only are these sales not subject to special stamp duty restrictions, but also businesses in various industries, such as catering, pharmacies, and food processing, have a certain demand for the units. The rental income of such factories and warehouses in industrial buildings is relatively stable, relative to other types of properties, generating stable average rate of return. Industrial units with smaller sizes and unloading docks usually have smaller values, which are easier to attract investors’ attention.
According to statistics from the Bureau of Statistics and Census, a total of sixteen industrial unit transactions were recorded in the first quarter of 2021, an increase of 23.1% over the same period last year, and the amount involved jumped 43.6% year-on-year to MOP 224 million. Over the same period, the average price per square foot was MOP 4,797, up 0.1% and 26.4% year-on-year and quarter-to-quarter, respectively.
However, the transaction volume continued to be sluggish, and the transaction volume of industrial units in the first quarter was similar to that in the fourth quarter of last year, amid the lack of market supply. Although there are more potential buyers of industrial units in the market, users are more cautious in entering the market. As such, the current transaction volume has indeeded not yet reflected the actual market sentiments in industrial units.
According to market information, the large transactions have mainly concentrated in industrial buildings in the new reclamation area of Areia Preta. A unit with an area of 6,528 square feet in Room C on the lower floor of the Industrial Nam Fong Building was transacted for MOP 18.284 million in the first quarter, or MOP 2,800 per square foot, up 12% year-on-year. With the further control of the epidemic, commercial tenants in the industrial sector have taken advantage of the market price of industrial buildings to return to the level at the beginning of the epidemic, and are looking for opportunities to purchase their own use.
The industrial property market in Macau is likely to recover further in the next few quarters. The average price of industrial units is expected to increase by 5-10% this year. In view of the lack of market supply, prices of the industrial units are likely to stay high resilience. At present, long-term investors could pay more attention to the high-quality industrial buildings that have the ability to preserve value, with relative high returns, and have fewer restrictions in purchases, such as Keck Seng Industrial Center, Fok Tai Industrial Building, and Nam Leng Industrial Building.