http://www.businesstimes.com.sg/arch...-plot-20140426

Published April 26, 2014

Lian Beng buys $46.2m Leng Kee plot

Listed construction firm to enter car business via JV with parallel importer VinCar

By samuel ee

[email protected]


LISTED construction company Lian Beng Group has successfully bid $46.2 million for a property in the prime Leng Kee Road motor belt and is going into the automotive business.

The company has tied up with well-known parallel import company VinCar to form Wealth Assets Pte Ltd, a joint venture company which is 80 per cent owned by Lian Beng.

Wealth Assets plans to develop the land at 24 Leng Kee Road when the purchase is approved by the Housing Development Board.

The light industrial property has an area of slightly over 70,000 square feet and currently houses the body shop operations of authorised Toyota distributor Borneo Motors Singapore (BMS).

BMS is selling the property, which was brokered by DTZ, because it is redeveloping an existing property at Pandan Crescent and erecting an eight-storey complex to house its various motor vehicle businesses.

When the Leng Kee Road property was put up for tender earlier this year, it is said to have attracted overwhelming interest. There were about a dozen bidders, more than half of which are understood to be car-related businesses.

This is due to the Leng Kee Road/Alexandra Road area's position as Singapore's prime auto belt.

Car distributors either want to expand their presence there, if they are already in the area, or plant their flag there if they are not.

But because the one kilometre stretch and the adjacent Alexandra Road are fully built up, it is almost impossible to find available space for a showroom and workshop.

Over the years, some car companies have resorted to siting themselves along the periphery of the belt at Kung Chong Road and Chang Charn Road.

But despite having new or renovated buildings, their location means they remain poor cousins to the main Leng Kee Road and Alexandra Road strips.

VinCar was started by Vincent Tan as a used car business 25 years ago. Mr Tan began parallel importing of new cars in 1999, rode the boom in the early 2000s, weathered the global financial crisis in 2008 and 2009, and endured the COE crunch that followed to become what is today a rarity - a big and successful parallel importer. VinCar used to import Japanese models but is now better known for its wide range of European luxury and sports cars. It currently occupies several units at the neighbouring Alexcier Building.

Lian Beng is one of Singapore's major home-grown building contractors. The company is an investment holding company of the group, which is engaged in building construction and civil engineering activities in the public and private sectors and engineering and leasing of construction machinery and equipment.

It will finance its share of the cost of the acquisition from internal funds and/or bank borrowings.