THERE seems to be more buzz for big-ticket industrial properties in Singapore, with sentiment buoyed by the US Federal Reserve’s 50-basis-point interest rate cut in September, with signals of more to come.
AEW is said to be selling Admirax, a seven-storey light industrial building in the Woodlands area, for about S$155 million.
The Business Times understands that the buyer is a family office. The price reflects about 6 per cent net yield based on current rental income from existing leases. The occupancy rate for the building’s 476,480 square feet (sq ft) net lettable area stands at nearly 80 per cent.
Admirax sits on a site with a 60-year leasehold tenure from October 2000, leaving a balance of nearly 36 years. The building is located at 8 Admiralty Street.
Word in the market is that a sale and purchase agreement was entered into recently.
The property’s tenants include urban farm Sustenir and minimally invasive medical device and component maker Quasar Medical. There is also a food court and childcare facilities.
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The building received a Temporary Occupation Permit in September 2009. Its gross floor area (GFA) of about 581,840 sq ft has reached the maximum allowed for the 232,735 sq ft plot, based on the 2.5 plot ratio designated for the site, which is zoned for Business 1 use under the Urban Redevelopment Authority’s latest Master Plan.
Global real estate investment manager AEW bought Admirax from BlackRock for S$142 million in 2021 and spruced up the property in the same year. Among other things, it upgraded the main entrance, lift lobby, drop-off area and toilets.
Knight Frank is understood to have brokered AEW’s sale of Admirax to the family office.
Separately, an expression of interest (EOI) exercise for the sale of Bendemeer Centre, located in the city fringe, closed on Oct 23. Word in the market is that the asking price is S$145 million and that the exercise garnered a handful of bids.
Knight Frank and Cushman & Wakefield conducted the EOI exercise.
The seven-storey building, next to Bendemeer MRT station on the Downtown Line, is owned by an entity controlled by Raymond Ng Ah Hua’s BS Capital. It paid S$88 million for the property in 2015 and has refurbished the asset.
Located within the established Kallang industrial hub, Bendemeer Centre is on a site with a 99-year leasehold from Mar 1, 1966, leaving a balance of about 40 years and five months.
The building, completed in 2002, has a NLA of about 170,000 sq ft. The occupancy rate is in the region of 70 per cent. Tenants include chipmaker MaxLinear and Singapore-based Internet service provider ViewQwest.
Assuming the building were to be fully let, the net yield on the S$145 million asking price is estimated at just below 5 per cent.
Bendemeer Centre has a gross floor area of 199,887 sq ft, which means the maximum allowable GFA for the 79,818 sq ft site has been reached.
That said, there is potential to add value to the asset by tenant repositioning, such as converting the ground floor space to a showroom. The incoming buyer can also put solar panels on the roof.
Industry observers noted that a key selling point for Bendemeer Centre and Admirax is that they are on sites that are not under the purview of JTC Corporation, and hence not restricted by its policies on assignment of lease and sub-letting. This enables the development to attract tenants that are ineligible for JTC sites.
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