Singapore is one of the world’s leading financial hubs and an attractive destination for both residents and investors alike, and offers an unparalleled real estate market with a wide array of opportunities.

Many investors are familiar with the typical asset classes in residential and commercial office properties, however, we would like to bring your attention to an asset class that is still quite under the radar – food factories in the light industrial zoning. In particular, a freehold food factory in Mandai, an area slated for a major transformation by the Singapore government.

Location – Sungei Kadut Eco-District

Mandai is located within the Sungei Kadut eco-district redevelopment area. Located in the North of Singapore, this the birthplace of our manufacturing scene. It is also a space to watch as it is undergoing a major transformation.

Four new precincts—built specially for agri-food technology, waste management and recycling, metal, timber and furniture industries—make up the new Sungei Kadut Eco-District. Sungei Kadut will be home to high-tech businesses and knowledge based jobs that draw a modern workforce.

Where stretches of ad hoc factories used to lie, you’ll find industry clusters of synergistic businesses housed in multi-tenanted developments such as Agri-Food Innovation Park and Kranji Green.

There will also be plenty of greenery and lifestyle amenities, with a highly-connected network of nature trails and activity corridors.

So why invest in a food factory you ask?

Demand – A Bright Outlook

Post COVID-19 pandemic, the food scene has shifted drastically. The change in consumer habits resulted in a higher demand for food deliveries and this change is here to stay. More F&B business have shifted from the traditional restaurant shop front to food factories and cloud kitchen solutions to save on their cost of operations.

Singapore’s growing food manufacturing and processing industry is spurring a vibrant food factory market.

Based on a Singapore Food Statistics 2022 Report by the Singapore Food Agency (SFA), the number of licensed food manufacturing and processing establishments (including central kitchens) have been rising steadily even through the pandemic periods.

In 2022, we have also seen major players in the food industry such as Koufu and The Neo Group establish purpose-built facilities for greater operational efficiency and automation.

Source: Singapore Food Agency

Notably, the surge in demand for food delivery services at the height of COVID-19 in 2020 and 2021 fuelled the rise of central and cloud kitchens and, in turn, the demand for food factory space.

For example, Smart City Kitchens, a major cloud kitchen provider has expanded to 10 locations island-wide, attracting major F&B players to set up their cloud kitchens within its facilities. Food delivery platforms like GrabFood have also ventured into the cloud kitchen space.

In addition, the Food Services Industry Transformation Map (ITM), launched in 2016, also played a significant role in supporting enterprises with multiple outlets. More F&B companies have since established central kitchens to automate their operations for economies of scale and to reduce manpower reliance.

Government Support – the Food Manufacturing Industry Transformation Map (ITM) 2025

The refreshed ITM, developed by EnterpriseSG in collaboration with key industry players and other government agencies, also aims to establish Singapore as a trusted food and nutrition leader and the preferred launchpad into Asia for quality brands.

It will continue to focus on driving internationalisation and innovation among local companies – also a key pillar in the previous ITM launched in 2016 – while trying to build Singapore as a regional food hub and creating quality jobs for locals through a Jobs Transformation Map (JTM).

Supply

While the food industry indicates healthy demand, the supply of spaces remains largely restricted by the Singapore government. Companies handling food are only allowed to operate in food factories or buildings in the designated JTC food zones, which are small parcels of land indicated in the diagram below.

Fig 1: Locations of designated JTC Food Zones

Source: Officespaces.com.sg

Upon doing a deeper dive into the newly built and upcoming supply of food factories in Singapore,  we came up with this list. And what is interesting to note is that there are quite a number of single-user food factories, and many of the multi-user food factory are under JTC.

Fig 2: Completed and Upcoming Food Factories List, 2023

Source: Officespaces.com.sg

Freehold is Rare

Another important trend to note, since 2012, the Singapore government has been only releasing land with 20 and 30 year tenures under IGLS (Industrial Government Land Sales). Freehold properties are becoming more and more rare in land scarce Singapore. Read more on the New Trend of Industrial Land Sold for only 30 Years Leasehold.

What does this mean for investors?

This actually means that there is a very very limited supply of non-government owned food factory units for small food businesses and investors to purchase in Singapore. Freehold food factory units are an even rarer asset class.  New launches in the past years such as CT FoodChain, Apex Foodworks and Foodfab @ Mandai have all been fully sold out by developers. Properties that are high in demand and low in supply make very good investment opportunities.

If you have read the article to this point… Seize this investment opportunity today– purchase a freehold food factory direct from developer!

We can see that you are interested in an investment property, why not get in touch with us and schedule an appointment at our sales gallery in Mandai to find out more about the available projects for sale?

What are the new launch freehold opportunities in Mandai?

• CT FoodNex
• Food Vision
• FoodFab@Mandai (fully sold)

As a commercial investor you enjoy these additional benefits:
– Avoid cooling measures! No ABSD
– No restriction on foreign ownership
– Potential capital appreciation
– Food factories are in limited supply
– Freehold

Get in Touch Today!