BlackRock close to selling Woodlands industrial building

Singapore

BIG-TICKET sales of industrial properties continue to be buoyant.

BT understands that BlackRock is in advanced stages of stitching a deal to sell a high-specification light industrial building along Admiralty Street for S$142 million. The buyer is tipped as US-based real estate investment manager AEW.

The pricing for Admirax, a seven-storey property in the Woodlands area, reflects about 6 per cent net yield. It is on a site with 60-year leasehold tenure that began in October 2000, which leaves a balance tenure of almost 40 years.

BlackRock paid S$106 million for Admirax in 2018 and did a minor spruce-up and raised its occupancy, which currently stands at about 85 per cent.

The building's net lettable area is 469,150 sq ft.

Its gross floor area (GFA) of about 582,000 sq ft has reached the maximum allowed for the nearly 233,000 sq ft plot based on the 2.5 plot ratio designated for the site, which is zoned for Business 1 use under the Urban Redevelopment Authority's Master Plan 2019.

Separately, in the western part of the island, a private property fund managed by Logos SE Asia has entered into a put and call option agreement to buy 28 Quality Road for S$49.7 million from Pteris Global.

The property is on a 269,090 sq ft site with a 30-year leasehold tenure that began in June 2007, with an option to renew for a further 30-year term.

Market watchers expect the buyer to pay an upfront premium to JTC Corp for the balance period of the initial 30-year lease term.

The property is predominantly a single-level warehouse with a three-storey office block attached. It is partly occupied by vendor Pteris Global with the rest of the space leased to Iron Mountain, which uses the premises as an archival storage facility, BT understands.

The property's existing GFA is about 220,000 sq ft - not even half the maximum allowable of 538,180 sq ft based on the 2.0 plot ratio designated for the site under Master Plan 2019. The plot is zoned for Business 2 use.

Market watchers note that the asset's significant untapped GFA presents an opportunity for redevelopment. The site has triple frontage along Quality Road, International Road and Jalan Boon Lay and will be literally a stone's throw from the future Tukang station under stage 3 of the Jurong Regional Line.

CBRE is understood to be brokering the sales of 28 Quality Road and Admirax, but when contacted, its head of industrial and logistics services for Singapore and South East Asia, Rimon Ambarchi, declined to comment.

The property consulting group has also brokered several other industrial transactions in the past six months - including Lucas Real Estate's S$175.8 million sale of the Sandcrawler building along Fusionopolis View to Blackstone.

It also handled the S$102 million sale of Sime Darby Business Centre at 315 Alexandra Road by a joint venture between Blackstone and a Sime Darby entity, and the S$129.6 million sale of 7 Bulim Street by PGIM; both properties were snapped up by AIMS Apac Reit.

The keen investor interest in industrial properties comes on the back of manufacturing and logistics businesses generally doing well, which is helping to drive occupancy and rents in the sector.

Globally, investors see industrial property as being more resilient vis-a-vis most other real estate sectors. Also driving demand is the low interest rate environment.

Other recent sizeable industrial real estate investment sales in Singapore include the Breadtalk IHQ Building in Tai Seng Street and the former Big Box property in Jurong East.