Solar panel maker in S$585m sale, leaseback deal

Singapore

THE Singapore unit of Norway-headquartered solar firm REC is understood to have entered into a proposed S$585 million sale-and-leaseback transaction on its Tuas South property.

The deal with Australia-based Logos Property, is one of the biggest of its kind here, and involves only the real estate; the fully-integrated solar-panel manufacturing facility it houses will continue to operate as normal.

Located along Tuas South Avenue 14, the low-rise development has a gross floor area of about 1.6 million sq ft. It stands on a 2.72 million sq ft site directly allocated to REC by JTC Corp in 2008, when the company was known as Renewable Energy Corporation.

The site has a 30-year leasehold tenure, with an option to renew the lease for another 30-year term.

The buyer, Logos Property, offers asset management, investment and leasing services for industrial/logistics properties; it also has property-development capabilities.

Besides Australia, the company has operations in China, Singapore, Indonesia and other parts of Asia.

The group's existing Singapore industrial property investments are in places such as Tuas and at 8 Jurong Pier Road.

Logos, a privately-held group set up by property industry veterans Trent Iliffe and John Marsh, also counts among its shareholders Macquarie Bank and Ivanhoe Cambridge, the real-estate arm of one of Canada's largest pension fund managers Caisse de Depot et Placement du Quebec.

REC opened the Tuas South Avenue 14 facility, which involved an investment of S$2.5 billion, in 2010.

One of the biggest investments in the island's clean-energy sector, the plant operated by REC's Singapore unit uses the raw silicon procured from an overseas sister company, turns it into wafers, then etches the wafer into solar cells before arranging them in panels.

REC is part of Bluestar Elkem group, controlled by Chinese interests.

The real-estate deal, which is subject to JTC's approval, is expected to be completed by year end.

It is understood to have been brokered by CBRE. When contacted, its executive director of industrial and logistics Rimon Ambarchi, declined to comment.

Market watchers view the sale-and-leaseback deal as a form of financing.

The solar panel manufacturing industry is facing headwinds, including rising production capacity among Chinese suppliers of solar panels and growing protectionism.