Fragrance Group boss bags two industrial buildings for S$101 million
ENTITIES controlled by Fragrance Group founder and chairman James Koh have picked up two ageing freehold Singapore industrial buildings for a total of nearly S$101 million.
He is paying S$61 million for a five-storey property at 3 New Industrial Road, in the Upper Paya Lebar-Bartley area. The property, with a site area of 34,125 sq ft, is substantially occupied by the seller, Kimly Construction, which is expected to lease back space in the building for a short period. There are also other third-party tenants in the building. Kimly Construction is owned by a Khoo family.
The other property Koh is buying, for nearly S$40 million, is at 3 Kallang Pudding Road. The low-rise building, with a site area of about 24,700 sq ft, is at the corner of Kallang Pudding and Tannery roads. The property is being sold by Cheng Meng Furniture Group, controlled by a Choo family. The seller occupies the building.
Under the Urban Redevelopment Authority’s latest Master Plan, both sites are zoned for Business 1 use, which allows light and clean industrial use. They also have the same plot ratio, that is, the ratio of maximum gross floor area to land area – 2.5.
Market watchers could not ascertain whether the two properties have untapped gross floor area. However, they suggested that the sites could be redeveloped into facilities built to modern industrial property specifications and green standards, which would command higher rental and capital values.
That said, Koh may just continue to lease out the properties in the near- to mid-term.
Brenda Ong, executive director of logistics and industrial at Cushman and Wakefield, said: “There is still keen interest in older freehold industrial properties in Singapore, despite low rental yields. These assets are sought after primarily for potential capital appreciation.”
Ong, who was uninvolved in the sale of the two properties, added that older freehold industrial properties also offer buyers an opportunity to redevelop the sites into higher-spec industrial buildings, either for long-term rental income or for strata subdivision and sale.
Koh, through various privately-held entities, owns hospitality, office, industrial and other assets, predominantly in Singapore. He privatised the Singapore Exchange-listed Fragrance Group in 2021, and Global Premium Hotels in 2017.
Fragrance is now redeveloping the former Tower 15 site at 15 Hoe Chiang Road into a hotel and serviced-apartment project.
Last year, Fragrance sold Victory Centre, a seven-storey, ramp-up light industrial facility near Aljunied MRT station, for S$90 million to an entity linked to LaSalle Investment Management.
Fragrance developed the property on a 67,944 sq ft, 60-year leasehold plot at the corner of Sims Drive and Aljunied Road; it had clinched the site for S$43.39 million in a URA tender in 2012.
