Ravi Chandran
The properties at 12 Tagore Drive and 205 Henderson Road present rare freehold industrial investment opportunities in well sought-after locations
Colliers International announced on July 6 that it will put up two rare freehold industrial properties for sale via an expression of interest exercise (EOI) on 7 July 2020. The two properties are namely 12 Tagore Drive and 2 strata units at 205 Henderson Road with indicative prices of S$55 million and S$7.98 million, respectively.
One of the rare freehold industrial properties is at 12 Tagore Drive
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The indicative price of S$55 million translates to S$573 per square foot (psf), based on an existing gross floor area (GFA) of 95,819 sq ft (8,901.8 sqm). The property is a 4-storey freehold warehouse with a site area of approx. 57,641 sq ft (5,355 sqm).
Located in Tagore, an established industrial cluster, the property enjoys a strong connectivity via major arterial roads and expressways including Upper Thomson Road, Yio Chu Kang Road, SLE, TPE and CTE. The upcoming Lentor MRT station situated nearby will offer more accessibility to the vicinity when it is in operations after July 2020.
Under the Master Plan 2019, the site is zoned as Business 1 at plot ratio 2.0, translating to a maximum allowable GFA of approx. 115,281 sq ft (10,710 sqm). Subject to the relevant approvals, the site could be redeveloped to maximise the GFA.
Steven Tan, Senior Director of Capital Markets & Investment Services at Colliers International, said, “This presents a rare opportunity for buyers to acquire a freehold warehouse in an established industrial location. It also offers buyers the flexibility to redevelop the property to maximise the GFA for their own use or move in immediately for their business operations. We also expect this opportunity to attract developers looking for freehold industrial redevelopment sites.”
Two Strata Units in 205 Henderson Road
The total strata area for the two industrial units is approx. 10,926 sq ft (1,105 sq m), with an indicative price of S$7.98 million, or approximately S$730 psf on strata area. This opportunity comprises 2 freehold strata industrial units located in Henderson Industrial Park, within Bukit Merah planning area.
The property is well-served by major arterial roads and expressways including Jalan Bukit Merah, Henderson Road, AYE and CTE and is a short 11-minute drive away from Singapore’s Central Business District (CBD). Bukit Merah Bus Interchange is also located nearby, providing a transportation alternative for employees and customers. Both units are currently vacant and are to be sold with vacant possession.
Mr. Tan added “These units are located in Bukit Merah, a well sought-after industrial location for industrialists. This opportunity is excellent for end-users looking for showroom or warehousing space for their business operations.”
“Colliers International research forecasts the industrial supply to taper off in the next 5 years. Industrial assets command higher yields than office and retails assets and remain the most insulated compared to other asset classes in this pandemic.”
The EOI for both rare freehold industrial properties will close at 3pm on Tuesday, 4 August 2020.
The sale of the rare freehold industrial properties comes amidst research reports suggesting manufacturing and technology sectors are set to thrive post pandemic. Colliers International on May 29 released its Resilience and Rebound Ranking Report, identifying the most attractive industries over the past crises, the implications and opportunities for commercial real estate sectors post-coronavirus pandemic.
In assessing seven core trade sectors in Singapore – manufacturing, financials, construction, professional services, hospitality, retail and technology – Colliers Research considered three factors, GDP growth, stock index returns and earnings outlook.
Ms. Tricia Song, Head of Research for Singapore at Colliers International, said, “We recommend investors to focus on prime offices and industrial buildings, such as hi-spec space and business parks. Hotels and retail malls could also provide near-term opportunities. Occupiers should embrace technology and more flexible work strategies in the longer term.”
Top Resilience and Rebound Ranking of Core Trade Sectors
Colliers’ Research ranks the resilience and rebound potential of core sectors is based on three metrics: historical GDP performance and stock index returns during and post other major crises, as well as future earnings growth.
#1 Manufacturing: Manufacturing ranks top in our overall resilience and rebound ranking, on strongest GDP rebound, as well as second highest stock index returns and earnings outlook.
#2 Technology: Technology ranks second in our resilience and rebound ranking, driven by second highest GDP growth resilience, highest stock index returns and strongest earnings outlook.
#3 Hospitality: Ranking third, Hospitality is among the most volatile sectors, having experienced significant effects during the crisis, with a strong rebound expected to follow. Looking ahead, earnings growth is expected to be strong, giving it a favorable tilt.
Market Implications and Outlook
Industrial sector to benefit from Manufacturing rebound post-COVID-19
While the manufacturing sector is expected to contract in the near-term due to labour shortages amidst more stringent restrictions during COVID-19, our research suggests a strong rebound in the sector as Singapore emerges from the pandemic and Circuit Breaker measures. This bodes well for the industrial sector.
Rick Thomas, Head of Occupier Services for Singapore at Colliers International, said: “The strong rebound of the manufacturing sector expected post pandemic, together with increasing technology adoption, e-Commerce sales, delivery service needs, data broadband usage and other online activities, will directly benefit the sector across business parks, logistics spaces and data centres.”
Mr Paul Ho, chief mortgage officer at iCompareLoan, said: “industrial properties are seldom available as freehold, in that sense these properties are good buys.”
