SEB unit pays $200m for Ubi industrial property

SEB unit pays $200m for Ubi industrial property

 

A UNIT of SEB Asset Management has made its first investment in Singapore’s industrial property market. It is buying a new hi-tech industrial building at Ubi Avenue 1 from an associated company of Boustead Singapore for $200 million.

 

The part six, part seven-storey building with a basement is slated for completion by the end of this year. SEB’s $200 million purchase price works out to $485 per sq ft based on a net lettable area (NLA) of 412,772 sq ft.

 

The property, which will also have 469 parking lots, is being developed on a 177,537 sq ft site that has a remaining lease of 48 years. DTZ brokered the sale.

 

SEB is buying the property through special purpose vehicle Ubitech Hub Pte Ltd.

 

About 60 per cent of the building’s NLA has been committed to future tenants. Assuming average monthly rents of $3.80 to $4 psf commanded by new hi-tech facilities at Ubi, SEB’s net yield for the acquisition will be above 6 per cent, market watchers estimate.

 

Boustead will book a $26 million gain from the sale of the property by its 40 per cent associated company GBI Realty Pte Ltd.

 

SEB has made several office property acquisitions in Singapore over the past couple of years.

 

They include a 55 per cent stake in the freehold 79 Anson Road ($215 million or $1,937 psf); 12 floors of Springleaf Tower in Anson Road for $2,088 psf; and SIA Building in Robinson Road (about $526 million or $1,783 psf).

 

Market watchers say that SEB is one of several overseas property funds that are turning their attention to the Singapore industrial property market, which offers higher yields than the office properties such funds have been buying over the past few years here.

 

These big-name overseas funds will compete with Singapore real estate investment trusts and local private property funds, which have been the biggest buyers of industrial, business park and logistics properties on the island in recent years.

 

Last month, Ascendas Real Estate Investment Trust announced it had bought Creative Technology’s headquarters building at 31 International Business Park, Jurong East, for $246.8 million. This works out to $453 psf of NLA. The site has a 30 + 30 year lease from Dec 16, 1994. Colliers International brokered that deal.

 

Source: Business Times

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