Ravi Chandran
5 Pioneer Sector Lane factory put up for sale by OKH Global after property recorded significant impairment of $16.4 million
The Board of Directors of OKH Global Ltd announced on May 17 that it is launching a public auction for the proposed sale of the Group’s property located at No. 5 Pioneer Sector Lane, Singapore 628323 and is inviting interested purchaser(s) to bid for and become a purchaser for the Property.
OKH Group said that the Company had recognised a significant impairment of S$16,357,000 on 5 Pioneer Sector Lane factory over the last few years and may need to recognise a further loss if the Property is auctioned off at a price lower than the current book value.
OKH Global said it needs to expedite the sale as “any delay will incur additional months of amortisation cost and expenses which will further reduce the value of the property”.
Ratification is needed because “prospective buyers are likely to want an expeditious completion of sale and would not accept the uncertainty of prolonged approval process”, the group added.
| PARTICULARS | ||||
| Description of Property | Lot No. | MK/TS | Area | Title |
| No. 5 Pioneer Sector Lane,
Singapore 628323
|
1704L | MK 7 | 9146.3 sq.m. | Lease for the term of 10 years from 16/8/2008 and a further term of 19 years 11 months 16 days from 16/8/2018 subject to and upon the terms and conditions contained in the lease documents with JTC |
The Group announced that the Public Auction of the 5 Pioneer Sector Lane factory will be held at 10 a.m. on Tuesday, 4 June 2019 at No. 5 Pioneer Sector Lane, Singapore 628323.
The sale of the 5 Pioneer Sector Lane factory will be subjected to JTC Corporation and shareholders’ approval.
Table of Contents
The sale of 5 Pioneer Sector Lane factory comes at a time when the industrial property market is steadily improving in health. This improvement in the industrial property market comes at the back of a strong pick-up in leasing transactions to a record high. This has likely been underpinned by the more upbeat business sentiment alongside the positive economic and manufacturing data, which has emboldened more tenants and industrialists to review their real estate options.
https://www.icompareloan.com/resources/industrial-property-market-sector/
Compared with data from the previous three months, industrial space rent and prices remained relatively stable in the first quarter of the year suggested the JTC All Industrial Rental Index in Q1 2019. The report showed that overall occupancy rate for the industrial market remained flat q-o-q at 89.3% in Q1 2019. The JTC index showed that prices of industrial space saw minor declines in the 1st quarter of 2019.
Property observers have noted that although it is evident that industrial rents in general have bottomed, a significant rental recovery may be premature in the industrial space. Analysts have suggested that going forward, new business park properties and high-spec spaces should continue to enjoy rental improvements due to limited stock and tighter new supply, while warehouse supply is expected to slow down over the rest of 2019.
Leading real estate observers have said that they were optimistic that the industrial property market will likely bottom within the next 12 months, barring any unforeseen external shocks. They took into account the tapering pipeline supply that will allow demand to play catch up amid the positive economic outlook, barring any unforeseen external shocks.
https://www.icompareloan.com/resources/properties-successfully-sold/
One research in particular noted that industrial rents stagnated during 2018 due to the supply overhang from the preceding years. It believes that in 2019, the tapering of supply will lend support to the market and lead to marginal increases in rents despite the slowdown in manufacturing growth.
There are already signs of an uplift in economic and manufacturing sector performances, which may point to an imminent bottoming of the industrial property market.
Mr Paul Ho, Chief Mortgage Consultant at iCompareLoan, said that despite the property curbs introduced by the Government last year, Singapore is still an attractive residential market for investors.
Although the property market exuberance has been curbed to some extent with the property cooling measures introduced last year, Singapore as a property market investment destination still remains among the top – shoulder to shoulder with other cities in the world like London, New York, Shanghai and Sydney.
“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for mortgage loans in the region. The industrial property market price recovery is observed to be broadening,” Mr Ho noted.
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