Perennial consortium to acquire former Big Box in Jurong East for S$118m

Singapore

A CONSORTIUM including real estate firm Perennial Real Estate Holdings will be acquiring the former Big Box property in Jurong East for S$118 million, drawing on the Jurong Lake District's potential as the upcoming second central business district.

Over S$70 million is expected to be doled out to redevelop the site into a business park named Perennial Business City, marking Perennial's foray into the asset class, it said.

Perennial, through its wholly-owned subsidiary PRE 15, had exercised the call option under a put and call option agreement previously signed with the receivers and managers of Big Box Pte Ltd.

It will own a majority 51 per cent stake in Perennial Business City, while other investors hold the remaining. Other investors include an investment vehicle of Perennial chairman Kuok Khoon Hong, it said on Friday in a press statement.

The redevelopment will raise the property's existing gross floor area to 1.5 million square feet (sq ft) from 1.4 million sq ft, based on a maximum permissible gross plot ratio of 2.5. The net lettable area will increase to 1.1 million sq ft from one million sq ft

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The new Perennial Business City will feature large floor plates, ample car parking spaces and a large rooftop garden with an amphitheatre, Perennial said. Currently, Big Box's spaces are predominantly designed for warehousing and warehouse retail usage.

Perennial said it has obtained JTC's confirmation for the zoning of the site to be changed to business park use from business 1 (white) use.

The eight-storey Big Box mall was constructed in 2014 and originally used as part of a warehouse retail scheme. It sits on a land area spanning about 606,600 sq ft and is located in the Jurong Gateway precinct of the Jurong Lake District.

Besides being in close proximity to International Business Park and one-north research and business park, Big Box is also near retail and commercial developments such as Jem, Westgate, JCube and IMM, as well as hospitality facilities such as the Genting Hotel Jurong.

The property is linked to the Ng Teng Fong General Hospital and Jurong Community Hospital, complementing potential biomedical sciences and healthcare tenants, Perennial said.

The receivers and managers of Big Box Pte Ltd launched an expression of interest exercise for the property in April last year. This followed a voluntary liquidation by Big Box initiated in September 2018, and approval of a credit restructuring scheme for TT International, which owns 51 per cent of Big Box.

The transaction is expected to be completed by mid-February 2021 and redevelopment works will progressively be completed from the fourth quarter of the same year.

Perennial chief executive Pua Seck Guan said: "We are pleased to have the opportunity to redevelop the asset to capitalise on the burgeoning demand for business parks, and for the new Perennial Business City to add to the vibrancy of the Jurong Lake District as it transforms to become the largest central business district in the west of Singapore."

Perennial has appointed CBRE Singapore to market and lease the Perennial Business City to potential tenants from "high-value industries" including information and communications technology, biomedical sciences, fast-moving consumer goods and financial institutions.

The proposed deal comes as the outlook for business parks and high-spec properties remains favourable. Both segments should continue to see healthy take-up from the biomedical, technology and precision engineering industries, DBS Group Research said in a separate note on Friday.

Although 2021 will see excess supply due to the delayed completion of about 700,000 square metres of new supply this year, the supply of business parks and warehouses will "remain constrained".

The Urban Redevelopment Authority envisions the Jurong Lake District to be the biggest regional centre outside the central business district, bringing jobs, amenities and recreational activities closer to the western part of Singapore.

The district's master plan was enhanced in 2017 with the decision to establish the Kuala Lumpur-Singapore High Speed Rail terminus in Jurong East, before the project was temporarily halted.

In October, real estate consultancy JLL was appointed to market Jurong Lake District amid plans to promote the district.

With a size of 410 hectares, the district is carved into four key precincts: Jurong Gateway, a new mixed-use precinct Lakeside East, leisure and recreational area Lakeside West and an International Business Park.