Mapletree Industrial Trust awards S$127.1m Kallang contract to Lum Chang

Singapore

CONSTRUCTION player Lum Chang Holdings on Monday said its wholly-owned subsidiary Lum Chang Building Contractors (LCBC) has secured a tender for an industrial project at Kallang Way, which is part of the Geylang planning area.

The contract, valued at about S$127.1 million, is to be executed with DBS Trustee as trustee of Mapletree Industrial Trust (MIT).

The project is scheduled to be completed over 21 months. Its scope of works includes the construction of two multi-user general industrial buildings.

The contract commencement date is slated for late November 2020.

In response to queries from The Business Times, MIT said that aside from the two buildings, there will be a third one at the new high-tech precinct. The construction contract for that is expected to be awarded later.

MIT announced in July last year that it would be redeveloping the flatted-factory cluster, Kolam Ayer 2 Cluster, along Kallang Way at a total project cost of about S$263 million.

The proposed project would include a seven-storey build-to-suit facility for a German medical device firm, which is set to account for about 24.4 per cent of the enlarged gross floor area, the real estate investment trust's manager had said then.

For the two other blocks, the manager will target high value-added and knowledge-based businesses from the advanced manufacturing, information and communications technology sectors.

Upon completion of the redevelopment of the cluster, it will comprise the three high-tech buildings with a total gross floor area of about 865,600 square feet.

Lum Chang on Monday said that with the latest award, the total outstanding value of construction works yet to be reported as revenue for LCBC amounts to about S$1.9 billion

Earnings from the contract will be recognised progressively according to the stages of its completion, added the mainboard-listed company. The project is not expected to have a material financial impact on the Lum Chang group's results for its current fiscal year ending June 30, 2021.

Shares of Lum Chang finished Friday at S$0.35, up S$0.01 or 2.9 per cent. Meanwhile, Units of MIT rose S$0.01 or 0.3 per cent to end the day at S$3.02.