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Kalpana Rashiwala
713 words
10 November 2008
Business Times Singapore
English
(c) 2008 Singapore Press Holdings Limited
The assets are said to be worth more than $300 million and comprise Kallang Bahru
Complex and the adjoining Kallang Avenue Industrial Centre, Corporation Place in
Jurong, and Technopark@Chai Chee.
CapitaLand's plan to divest the portfolio reflects its recent strategy of exiting
the industrial/logistics arena and focusing on its core strengths in commercial,
residential and serviced residences, market watchers say.
Even up to six months ago, the property giant had ambitions to grow in the
industrial/logistics real estate space. It is said to have bid, unsuccessfully,
last year for the $1.7 billion portfolio of industrial properties divested by JTC
Corporation. And not too long ago, CapitaLand had its eye on listing an industrial
Reit, some analysts noted.
But just a few months ago, the Singapore-listed group made a strategic decision to
focus on its core strengths with the crash in financial markets.
'What this also means is that within the Temasek stable of property companies, the
logistics/industrial sector will be left pretty much to Mapletree Investments
group,' a market watcher noted.
In September, BT reported that CapitaLand had put on hold its tie-up with
subsidiary Australand to set up a pan-Asian development platform in the
industrial/ logistics business announced in February this year.
The two adjoining industrial properties at Kallang Avenue that CapitaLand owns are
understood to have redevelopment potential. Kallang Avenue Industrial Centre
comprises four blocks of two-storey workshops, while Kallang Bahru Complex is a
nine-storey flatted warehouse.
The two sites are zoned for Business 1 use (similar to light industrial use) with
a 3.0 plot ratio, of which at least 2.5 must be set aside for B1 use, with the
rest for white uses. (The plot ratio is the ratio of maximum potential gross floor
area to land area.)
Kallang Bahru Complex is on a site with about 70 years of remaining lease, while
the Kallang Avenue Industrial Centre plot has a balance lease term of some 67
years.
The two properties were part of the former Pidemco Land portfolio. In 2000,
Pidemco and DBS Land merged to form CapitaLand.
Corporation Place and Technopark@Chai Chee used to be under DBS Land.
Technopark@Chai Chee, with a book value of $205.9 million as at Dec 31, 2007,
comprises six high-tech industrial blocks with a total net lettable area of about
1.14 million sq ft on a sprawling site that also has a gymnasium and other
amenities.
The building is almost 100 per cent occupied by tenants such as Flextronics, SIA
Engineering, British Telecom, Sun Microsystems, Alacatel-Lucent and DBS Bank.
On the other hand, the Chai Chee site could also be redeveloped. The site has
enjoyed an enhancement in use under the Urban Redevelopment Authority's Draft
Master Plan 2008, with a Business Park zoning (2.5 plot ratio), compared with
Business 1 zoning (2.5 plot ratio) under Master Plan 2003.
The property has total net lettable area of about 622,000 sq ft and is 75 per cent
owned by CapitaLand, with Ascendas Land owning the remaining 25 per cent. BT
understands that Corporation Place will be offered for sale on a 100 per cent
basis, that is, by both owners. CapitaLand fully owns the other three industrial
properties.