Ding Zhou to buy 41-year lease in ex-Mazda, Volkswagen showroom site in MacPherson

Singapore

FOR decades until late 2011, the main Mazda showroom used to be at 1 Kampong Ampat.

In more recent times, until March last year, the site was a showroom and service centre for Volkswagen.

The next change at the 67,000 sq ft site in MacPherson could well see a new light industrial building come up there.

The property is freehold and its owner, an entity controlled by Phng Hooi Chay - a member of the family that held the Mazda distributorship in Singapore from 1964 to late-2011 - is selling a 41-year leasehold interest for S$41 million to Singapore-incorporated Woodlands Smartisan Pte Ltd.

The option for the transaction was exercised last month.

Buyer Woodlands Smartisan is understood to be part of Ding Zhou Group, a Singapore-based organisation that has been around for more than a decade. 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.

The site that Ding Zhou is acquiring, at the corner of MacPherson Road and Kampong Ampat, has significant redevelopment potential.

A two-storey front office and showroom, and a three-storey rear workshop and car park now occupy the site.

Located 650 metres from Tai Seng MRT station on the Circle Line, the site is zoned for Business 1 use with a 2.5 allowable plot ratio; this means it can be redeveloped into a new project with up to 167,295 sq ft gross floor area.

Brenda Ong, executive director of logistics and industrial at Cushman & Wakefield, which did not broker the deal, said: "It makes sense for the incoming buyer to maximise the potential of this property through a redevelopment.

"MacPherson and the adjacent Tai Seng are a prime industrial property location and, given the proximity to the train station, leasing demand for a new light industrial building with high specifications should be good. This would make for a good investment property, generating rental income."

The buyer of 1 Kampong Ampat could also choose to strata-title the new development for sale, she added.

Market observers note that Ding Zhou has adopted both models for the industrial property segment in Singapore: A few years ago, it acquired the former Sime Darby Enterprise Centre at 10 Jalan Kilang in Bukit Merah; it still holds the property, now known as Bukit Merah Enterprise Centre, as an investment.

The group also developed E9 Premium at 61 Woodlands Industrial Park E9, which comprises 194 strata industrial units. These have all been sold, says Ding Zhou's website.

The market for big-ticket sales of industrial properties continues to be buoyant. Admirax, a high-specification light industrial building in Woodlands is being sold by BlackRock to US-based real-estate investment manager AEW for S$142 million.

When Mr Phng's Mazda Motor Singapore lost the distributorship for the Japanese brand in late 2011 (after 47 years) to the Eurokars Group, he leased 1 Kampong Ampat to Volkswagen the following year.

The property housed the German brand's second showroom and service centre on the island for about eight years.