ESR-Reit undertakes S$38.5m redevelopment of Senoko Loop property

ESR-Reit J91U is redeveloping its 21B Senoko Loop general industrial property into a build-to-suit, high-specification facility for existing master tenant NTS Components Singapore.

The redevelopment will cost about S$38.5 million and is expected to be completed by Q1 2024, the real estate investment trust's manager said in a press statement on Tuesday (Apr 12).

It will also raise the number of high-spec assets in ESR-Reit's portfolio to 9, representing 18.4 per cent of its portfolio valuation as at Dec 31, 2021.

Adrian Chui, chief executive and executive director of the manager, noted: "The redevelopment will increase the proportion of resilient New Economy assets in our portfolio, enabling us to continue delivering long-term sustainable value to our unitholders."

21B Senoko Loop is located in the Woodlands industrial estate, an area with a limited supply of high-spec properties. It comprises a 7-storey factory cum dormitory block and a 4-storey warehouse block with a combined gross floor area of 195,823 square feet (sq ft).

The property sits on a plot spanning 80,241 sq ft with a remaining tenure of about 31.1 years as at Dec 31, 2021, making it attractive to undergo this redevelopment, the manager added.

The redevelopment will be executed in 2 phases, the first to be completed in the first half of 2023 and the second will follow about 10 months after. This is to allow NTS to better plan and start its business expansion and operations with minimal delay, the manager said.

The 21B Senoko Loop property will be leased to NTS on a triple net basis for 15 years with annual rental escalations. NTS will pay utilities, maintenance expenses, property tax and land rent. The property will also house NTS Components' sister company NTS Mechatronics.

NTS Components Singapore is a wholly-owned subsidiary of NTS Group Asia, which specialises in complex mechatronic assemblies and manufacturing high-accuracy frames and sheet metal for the high-tech industry.

ESR-Reit units closed flat at S$0.415 on Tuesday, after this announcement was made.