Food factory site in Mandai fetches S$74 million, among recent big-ticket industrial deals

THE industrial property market has been buzzing with big-ticket sales in the past few months. These include a S$74 million deal for a freehold food factory development site in Mandai. A building in Senoko Loop, meanwhile, has fetched S$53.2 million and a property in Pandan Road is being sold for S$36 million; both are on JTC sites with balance leases of more than 20 years each.

A consortium that includes Singapore-based Ding Zhou Group and Unitedland Development was recently granted an option to purchase an old freehold industrial property with a land area of 50,630 square feet (sq ft) at 2C Mandai Estate.

The Business Times (BT) understands that the exercise of the option is conditional upon receiving the Urban Redevelopment Authority’s (URA) provisional permission to redevelop the site into a strata-titled food factory project.

Under URA’s Master Plan 2019, the site is zoned for Business 2 use with a gross plot ratio of 2.5. This means it can be built to a maximum gross floor area (GFA) of about 126,575 sq ft. The price of S$74 million works out to about S$613 per square foot per plot ratio, inclusive of an estimated land betterment charge of about S$3.5 million.

The property is being sold by a low-profile family, and the sale is being brokered by Christina Sim, senior director of capital markets for Singapore at Cushman & Wakefield.

Unitedland Development was incorporated in 2022 and it acquired the property development business of Fantasia Investment (Singapore) that same year. Fantasia developed the 6 Derbyshire condominium, near Keng Lee and Kampong Java roads, and Parkwood Collection, a strata landed housing project in Hougang.

Unitedland Development is wholly owned by Wang Lian, a Singapore citizen who hails from Xi’an in China’s Shaanxi province.

Ding Zhou Group is a Singapore-based organisation that has been around for about 15 years. Its key business is real estate development and investment, and it has a presence in Singapore, Cambodia and Australia. Some of the group’s investors were originally from China but are now either Singapore citizens or permanent residents.

Ding Zhou is familiar with the Mandai area; it is part of a joint venture (JV) that is developing Smart Food @ Mandai. The freehold project in Mandai Estate comprises 84 strata food factory units and a canteen.

At 1 Kampong Ampat, another JV of Ding Zhou has nearly completed developing an eight-storey strata titled light industrial building. The group also owns Bukit Merah Enterprise Centre at 10 Jalan Kilang. It acquired the building, formerly known as Sime Darby Enterprise Centre, in 2019.

Sale and leaseback deals

Meanwhile, Singapore Asahi Chemical & Solder Industries is selling its premises at 47 Pandan Road for S$36 million.

The property is on a 68,231 sq ft site zoned Business 2, with about 24 years and eight months land tenure left out of a 30-year lease issued by JTC Corporation, the reversionary owner. Its approval is required for the sale of the property.

BT understands the buyers are entities linked to funds managed by Fife Capital Group. The Sydney-based group, headed by Allan Fife, is an independent alternative asset manager; its primary businesses are fund and asset management, and investment advisory. The group has an office in Singapore and its unit Fife Capital Singapore has a capital markets services licence for fund management from the Monetary Authority of Singapore (MAS).

Market watchers noted that as Fife Capital Group will not be an end-user for 47 Pandan Road and instead is considered a third-party facility provider under JTC’s typology, it will be required to enter into a leaseback arrangement with the seller. Real estate investment trusts, investment funds, or trusts with the necessary licences from MAS fall under one of the categories of third-party facility providers allowed by JTC.

Observers expect a similar situation for British-American Tobacco (Singapore), which in February granted an option for the purchase of its premises at 15 Senoko Loop for S$53.2 million.

The intending buyer is a Singapore-incorporated vehicle controlled by a JV involving Mitsui & Co, Mitsubishi Estate, and an entity linked to Houston-based global real estate investment manager Hines. The two Japanese groups have stakes of 47.5 per cent each in the JV, while Hines holds 5 per cent. Hines Singapore has a capital markets services licence for fund management from MAS.

The property is on a 263,339 sq ft site with a balance land tenure of about 26 years. JTC is the reversionary owner of the site, on which stands a four-storey building with about 446,100 sq ft total GFA, comprising climate-controlled warehouse space, production space and admin ancillary area.

As a third-party facility provider, the JV will have to lease the property back to British-American Tobacco.

The Business 2-zoned site has a 2.5 plot ratio under URA’s Master Plan. Hence, it could be redeveloped to a maximum GFA of about 658,348 sq ft, an increase of nearly 48 per cent from the existing GFA .

A seasoned industrial property agent not connected to the sale noted that British-American Tobacco would have fetched a higher price for 15 Senoko Loop if it had found an end-user buyer that could operate in the existing climate-controlled facility with minor renovations, or explore a redevelopment of the site into a ramp-up food production facility (subject to approval by the authorities), or a warehouse.

When CBRE launched a marketing campaign for the property’s sale in October 2022, it had stated that the site would be ideal for food, pharmaceutical and logistics users. The indicative price was S$100 million.