Upper Paya Lebar Industrial Building Bought by Cathay Unit

Cathay unit buys Upper Paya Lebar industrial building

A unit of Cathay Group is understood to have bought an eight-storey freehold industrial building in Upper Paya Lebar for $31.8 million.

The price being paid for Tropical Industrial Building along Little Road, about 400m from Tai Seng MRT Station, works out to about $632 per square foot (psf) based on the building's total strata area of about 50,300 sq ft.

Going by the building's existing gross floor area of 62,375 sq ft, the price works out to $510 psf.

The buyer, Keris Investments, is said to be looking at using at least part of the premises for its own film operations and storage use.

Seven of the building's eight storeys are now leased. Leases for four floors run out in Q1 next year; the last lease expires in June 2014.

Tropical Industrial Building is being sold by an entity controlled by the Ng family that owns the Tat Hong group. The property, which received its Temporary Occupation Permit in September 1998, is on a site zoned for Business 1 use, which includes light industrial and warehouse use. It has a 2.5 plot ratio.

The property has eight strata titles, one per floor; its basement houses 20 parking lots.

Earlier this year, Tat Hong Investment sold One Howard, a five-storey freehold industrial building at the corner of MacPherson and Howard roads, for $30.3 million.

Separately, 700 Beach, sited between Golden Mile Complex and Golden Mile Tower and near Nicoll Highway MRT Station, is back on the market.

This time, its owners Fine Grain Property Consortium (Singapore) Pte Ltd and international interior design firm Hirsch Bedner Associates, are marketing the property themselves through a tender, which will close on Dec 10.

Fine Grain is an Irish private equity firm arranged by Colin MacDonald, who said: "The recent buzz in the Ophir-Rochor Corridor, along with ongoing developments at the Sports Hub and in the vicinity have generated some interest in the area in recent months."

The pricing expectation remains around $115 million or $1,759 psf based on its existing net lettable area (NLA) of 65,374 sq ft.

The property is on a site with a 99-year-leasehold tenure that started in April 2004. It was earlier marketed through an expression-of-interest exercise which closed in July. The exercise did generate interest, but some parties were concerned about not being able to obtain vacant possession because of ongoing lease terms, said Mr MacDonald.

But things have since changed. GroupM, part of the WPP Group and which occupies 34,500 sq ft, is set to move out when its lease runs out in March.

BT understands that GroupM will move to 18 Cross Street, where it will take up part of the space vacated by Marsh & McLennan Group, which is now in Asia Square Tower 1.

Hirsch Bedner, which occupies 12,000 sq ft at 700 Beach, is open to either leasing back this space from the building's new owner or moving out if that is the owner's preference.

Mr MacDonald said: "Effectively, what this means is that we'll be in a position to offer vacant possession for about 70 per cent of the building's NLA."

Outline planning permission for converting 700 Beach to hotel use was obtained from the Urban Redevelopment Authority last year. This has since lapsed, but there is an option to pursue full planning permission for a conversion to hotel use, said Mr MacDonald.

Fine Grain and Hirsh Bedner acquired the building - formerly a small office-home office development known as In-City Lofts - in 2008 for $70 million and pumped in a further $3.5 million to reposition it as a boutique office block.

Source: Business Times –22 November 2012