Tuesday, January 11, 2011

JTC selling off more industrial properties

INDUSTRIAL landlord JTC Corporation has embarked on the second phase of its exercise to sell off many of its industrial properties so it can focus on developing new ideas to give Singapore an edge.

The move also aims to promote greater competition in the market.

JTC is now selling 21 blocks of flatted factories and amenity centres mainly in areas such as Tai Seng, Kolam Ayer, Kallang Basin, Bedok and Kampong Ubi.

It has not put forward a guide figure but reports suggest the total could be in the range of $600 million to $700 million.

The first phase of divestments was finalised in 2008 when JTC sold 39 high-rise ready-built factories worth a combined $1.7 billion to Temasek Holdings unit Mapletree Investments.

The latest portfolio will be divided into two tranches according to location, tenure and size, with the two-stage tender process closing on March 1.

The firm is inviting potential buyers to submit business proposals to bid for the portfolio of more than 300,000 sq m.

Shortlised parties will then be invited to participate in a further stage, JTC said.

JTC chief executive Manohar Khiatani said the latest divestment phase is progressing well with the two-stage tender providing a rigorous process to find a suitable buyer for each of the two tranches.

'One of the objectives of the divestment exercise is to promote active competition in the industrial property market in Singapore so tenants will benefit from more options and choices.'

DTZ chief executive Ho Tian Lam added that it is rare that an industrial portfolio of this size is made available for potential buyers. 'We anticipate that this tender exercise will attract not only local interest but also foreign investors.'

Last month, DTZ was appointed the real estate consultant to manage and coordinate the second phase.

Mr Ong Kah Seng, Cushman & Wakefield's senior manager for research, said the tender response is likely to be 'encouraging', with active participation and optimistic offer prices from bidders.

'The optimism is supported by increasing investor interest due to the strong tenant demand base and an increasing recognition of industrial properties as investable assets.'

Rents are likely to enjoy gradual increases in the coming years, supported by the economic recovery, he added.

Mr Khiatani has said previously that JTC sold such facilities as it felt the private sector market was mature enough.

JTC said yesterday it will continue to focus on developing large-scale and innovative infrastructure projects that can create a differentiating advantage for Singapore. These include two underground rock caverns for oil storage on Jurong Island and a $60 million offshore marine centre in Tuas to be completed this year.

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