Renowned for their passion of dining out or getting takeaway via several delivery apps, Singaporeans’ habit is not slowing down at all. According to a recent poll, just 22% of Singaporean homes routinely prepare meals at home; many would rather have the ease of buying their food from outside sources. Rakuten Insight’s data on 24% of Singaporeans dining out or purchasing meals everyday and a shockingly 48% doing so several times a week supports this number, which signals a major cultural change. The expanding need for outside food has greatly raised the demand for food manufacturers in Singapore, so generating possibilities for investors and developers both.
The rise in demand for outside food has had a knock-on effect, driving food manufacturers all around to grow. Managing director of EL Development Lim Yew Soon claims that F&B businesses find it challenging to keep big kitchens given labour shortages and hefty rents in commercial buildings. Lim notes that labour shortages and hefty rents in commercial buildings make most F&B shops unable to afford to dedicate too much room for kitchens. “They outsource most of the cooking to food manufacturers in order to save kitchen space and lower the staff count.” As F&B companies look to maximise their operations and expenses, this outsourcing practice has grown rather popular.
Early on in recognition of this change, EL Development started Jurong Food Hub, a multi-user strata-titled, food manufacturing project in November 2008. Built next to Jurong Fishery Port Road in the western part of Singapore, the six-story, 128-unit ramp-up food factory was meant to satisfy the growing need for centralised kitchens and food processing areas. Following a JTC industrial government land sale (IGLS) tender, EL Development bought the 23-year leasehold property in 2007; the project was finished 2010. Jurong Food Hub was a financial success despite the rather short lease; all of the units sold by early 2011. The last resale deal took place in June 2022 when a 2,648 square foot sixth level apartment sold for $600,000, equating to $227 per square foot (psf).
After Jurong Food Hub proved successful, EL Development teamed up with Sim Lian Group in 2022 to renovate their nearby freehold industrial buildings housed at Mandai Estate, in Singapore’s northern area. Together, this partnership produced Food Vision @ Mandai, a 10-story, freehold ramp-up food facility with 115 strata-titled for sale. With about 40% of the units sold since its opening in late 2022, the project has attracted notable attention. With units ranging in size from 1,722 sq ft sold at an average of $1,434 psf, Caveats lodged reveal reflects the great demand for food processing facilities. Food Vision @ Mandai is planned to be finished next year, therefore augmenting Singapore’s already expanding food manufacturing space inventory.
Fascinatingly, investors also influence the demand for food manufacturers in addition to end users such central kitchen operators and food processors. More investors have been looking to food manufacturers as a substitute investment alternative to residential properties after property cooling policies implemented in April 2023 raised extra buyer’s stamp tax (ABSD) for foreigners and corporate entities. The attractiveness is in the possibility for consistent rental income and capital growth, particularly given the limited supply of such specialised industrial sites.
Another developer that has been rather important in the food manufacturing industry is Soilbuild Group Holdings. At Senoko Crescent, off Admiralty Road West in Sembawang, the group opened Senoko Food Connection, its first multi-user food facility in 2006. Fifteen stratum terraced manufacturing units with a 99-year lease from 1971 comprise the complex. Having all units sold just a few months of opening in early 2007, Senoko Food Connection was quite successful. The most recent sale at Senoko Food Connection took place in February 2023 when a 21,222 square foot flat sold for $3.04 million, or 145 psf.
Expanding on its success, Soilbuild bought an older industrial facility in the western part of Singapore and is rebuilding it into a new eight-storey, multi-user ramp-up food plant called Food Ascent. With 73% of the 125 strata-titled homes already signed up, the project—which has a 60-year lease from 1999—has seen remarkable sales since its February 2023 opening. With a 2,153 sq ft unit on the eighth story sold for prices ranging from $1.072 million ($498 psf) and a 2,766 sq ft unit sold on the first floor for prices ranging from $2.067 million ($750 psf), based on caveats registered. Lim Han Qin, director of Soilbuild Group Holdings, claims that the great interest in Food Ascent may be ascribed to its strategic location between the Tuas Mega Port and Tuas Second Link, which offer easy access for imports and exports from all around. Moreover, the location of the property near the Tuas Viaduct, which links to main motorways including the Ayer Rajah, Pan Island, and Kranji, improves its logistical attraction. Given their scarcity on the market, Lim also highlights the increased need for strata-titled food manufacturers.
With its Mandai Foodlink project, Lian Beng Group became among the first developers to follow the food factory trend in the northern region. Launched in November 2014, this 87-unit, 11-story development in Mandai Link finished in 2017. Reflecting the great demand for such premises in Singapore’s industrial sector, the project was completely sold by 2018. Mandai Foodlink’s success has inspired other developers to join the market, hence generating a flood of new strata-titled, multi-user food industrial complexes in the Mandai neighbourhood in recent years.
One prominent example is FoodFab@Mandai, a freehold, eight-storey, strata-titled food factory co-opened in 2021 by Welltech Construction and Hong Kong-listed ZACD Group. With prices ranging from $2.095 million ($1,125 psf) for a 1,862 sq ft unit on the ninth level to $4.976 million ($1,700 psf) for a 2,928 sq ft home on the second floor, the 47 unit building has witnessed excellent sales. When a 2,142 square foot first level apartment sold for $4.45 million in September 2022, the highest PSF price noted was $2,077.
Having opened CT FoodNex, a 10-storey, freehold, ramp-up food factory in May 2023, Chiu Teng Group is another major participant in the food factory area. Comprising 110 units ranging from 1,700 to 2,928 sq ft, the property is housed on the former BHL Factories site in Mandai Estate. 61 units (56%) were taken up at an average price of $1,545 psf during the first week of introduction, and to far almost 80% of the apartments have been sold. Although most CT FoodNex clients were single-unit purchases, Chiu Teng Group’s business development director, Jerome Ng, pointed out that others bought several units—one buyer purchased an entire floor of twelve units. About 90% of the purchasers were Singaporeans, according to Ng, and the remaining 10% were foreigners.
Another developer establishing themselves in the food industrial sector is Smartisan Realty. For $100 million the developer bought two adjacent freehold industrial properties at 10 and 12 Mandai Estate in April 2023. This represented Smartisan’s entrée into the multi-user, strata-titled industrial space. Smart Food @ Mandai is a 10-storey, freehold ramp-up manufacturing block with 84 strata-titled units. Roy Ang, head of marketing at Smartisan Realty, reports that since the VIP preview in January 2023, about thirty% of the apartments have been sold; many of the purchasers intend to use the area for cold rooms or central kitchens.
Driven by growing need for central kitchens, food processing areas, and cold storage facilities, Singapore’s food manufacturing business is flourishing in general. Profiting from this trend, developers such EL Development, Soilbuild Group, and Lian Beng Group have presented a variety of strata-titled, multi-user food manufacturing projects all throughout the island. The need for food manufacturers is projected to keep rising as more worldwide food brands and startups select Singapore as their testing ground for new products, therefore this industry has a good prospect for both end users and investors both.