Iron Mountain sells Jurong West building to ARA-Kenedix VCC for S$47 million

A SINGAPORE-INCORPORATED vehicle of US-based information management and storage group Iron Mountain has sold its property at 26 Chin Bee Drive in Jurong West for S$47 million.

Iron Mountain is understood to have entered into a long leaseback arrangement with the property’s new owner, which is an indirect wholly-owned subsidiary of variable capital company (VCC) ARA-Kenedix SJ Real Estate Fund.

The VCC is managed by ARA Fund Management, which is owned by ARA Asset Management (which was acquired by ESR in January 2022).

Iron Mountain uses the 26 Chin Bee Drive premises for its records-storage business. The 14-storey single-user warehouse building, at the junction of Chin Bee Drive and Corporation Road, is on a site with 30-year leasehold tenure from Apr 1, 2001 – this leaves a balance of eight years. There is an option to renew the lease for 19 years, subject to the approval of JTC Corporation; an upfront land premium would be payable.

Market watchers estimate the net property yield, based on the S$47 million transacted price, at about 6.5 per cent.

The property was transacted in early March 2023, with the sale completed later in the same month.

CBRE is understood to have brokered the deal. Rimon Ambarchi, the property consulting group’s head of industrial and logistics services for Singapore and South-east Asia, declined to comment when contacted by The Business Times.

Redevelopment potential

The building on site, which is around two decades old, has a gross floor area (GFA) of about 166,500 square feet (sq ft), or 1.78 times the site area of 93,315 sq ft.

There is redevelopment potential for the property. Under the Urban Redevelopment Authority’s latest Master Plan, the Business 1-zoned site has a 2.5 plot ratio, translating to a maximum GFA of about 233,290 sq ft.

The property was developed by a joint venture (JV) between Singapore’s Certis Cisco Security and Australian logistics group Brambles. In 1999, Brambles launched Recall as its global records management business, and the Singapore JV company was renamed Cisco Recall Total Information Management.

Over the years, strategic changes at Brambles resulted in the group acquiring Certis Cisco’s stake in the Singapore JV in 2013, and passing full ownership of that business to Recall Holdings. That was part of Brambles’ move to de-merge its Recall information management business, which became owned by Recall Holdings, a separate company listed on the Australian Securities Exchange and independent of the Brambles Group.

In 2016, Iron Mountain acquired Recall Holdings.

Iron Mountain’s businesses include record management, information management and storage, and data centres.