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Published November 1, 2011

Henderson Ind Building sold for over $99m

It is said to have been bought by an entity controlled by Fission's Melvin Poh

By KALPANA RASHIWALA


(SINGAPORE) An entity controlled by Fission Group's Melvin Poh is said to have bought the freehold Henderson Industrial Building for about $99.3 million.


Prominent location : Yi Kai Group and other parties are expected to partner Mr Poh for the purchase of Henderson Industrial Building (foreground), which is located at the Henderson Road-Jalan Bukit Merah junction

Sources say Tan Koo Chuan's Yi Kai Group and other parties are expected to partner Mr Poh for the purchase of the property, which has a prominent location at the junction of Henderson Road and Jalan Bukit Merah. Mr Tan and Mr Poh teamed up to develop The Alexis condo at Alexandra Road as well as Robinson Suites along Robinson Road.

The $99.3 million being paid for Henderson Industrial Building works out to around $476 per square foot (psf) of potential gross floor area. No development charge is payable as the 83,454-sq-ft freehold plot has a high development baseline.

The breakeven cost for a new industrial project could be around $880 psf, estimate analysts.

Outline planning permission has been obtained from the Urban Redevelopment Authority (URA) to redevelop the site into a 20-storey light industrial project with a plot ratio of 2.5. This would result in a project with a maximum gross floor area of 208,635 sq ft.

Henderson Industrial Building is being sold by its two owners - NTUC Income, which owns about 80 per cent, and Overseas Motors. The four-storey building was developed by Hong Fok more than two decades ago.

CB Richard Ellis brokered the sale through a tender exercise that closed on Oct 25.

Henderson Industrial Building's existing strata area is about 120,287 sq ft. The proposed redevelopment scheme could yield net saleable area of about 177,340 sq ft. The new project is expected to have strata units for sale. Most units could be around 1,200-1,500 sq ft with some showrooms on the ground floor to take advantage of the site's significant frontage of about 140 metres along Henderson Road and Jalan Bukit Merah.

Under Master Plan 2008, the site is zoned for Business 1 use with a 2.5 plot ratio (ratio of maximum gross floor area to land area).

Henderson Industrial Building's occupancy rate is currently at about 75 per cent and the property is being sold with existing leases that are said to be running out over the next two years.

The strata industrial property market has been appealing to investors diversifying out of the private residential segment, which has been affected by cooling measures such as seller's stamp duty to deter short-term trading and a lower loan-to-value limit.

Industrial property was the hottest segment of the Singapore private real estate market, based on third-quarter 2011 property market stats released last Friday by the URA.

The All Industrial price index rose 6.9 per cent quarter on quarter in Q3 2011, while the All Industrial rental index appreciated 2.4 per cent over the same period. Both price and rental gains for the sector surpassed those for private residential, office and shop space.