http://www.businesstimes.com.sg/arch...-sale-20140520

Published May 20, 2014

Irving Industrial Building put up for collective sale

Asking price for the 30 years old building is $220m

By Kalpana Rashiwala

[email protected] @KalpanaBT


THE buzz around Tai Seng MRT Station is set to increase with Irving Industrial Building nearby put up for collective sale.

The asking price for the six-storey property, believed to be about 30 years old, is $220 million. This works out to about $1,164 per square foot of potential gross floor area (GFA) including an estimated $46 million development charge.

The 65,309-sq-ft freehold site can be redeveloped into a new project with 228,581 square feet maximum GFA. It is zoned for Business 1-White use, with a 3.5 maximum gross plot ratio. Of this, at least 2.5 plot ratio (translating to 163,272-sq-ft GFA) shall be for Business 1 use and the remaining GFA of up to 65,309 sq ft will be for white uses.

While the unit land price of $1,163.70 per square foot per plot ratio (psf ppr) looks steep for industrial space, the substantial white component of the project will help make up for this, said Christina Sim, director, investment (capital markets) at Cushman & Wakefield, which is marketing the collective sale.

She expects the white component to be put mostly for retail use. "In the past 12 months, strata retail units have been sold at between $4,552 psf and $7,779 psf at Kensington Square, and at between $4,553 psf and $6,177 psf at Macpherson Mall, neither of which is within walking distance of an existing MRT station."

However, a point to note is that these prices were achieved for smallish units ranging from 140 sq ft to 377 sq ft.

Retail units in new developments are now subject to an average unit size of at least 50 sq m (538.20 sq ft) nett retail floor area under an Urban Redevelopment Authority guideline that took effect on March 27, 2013.

This was aimed at discouraging developers from building projects with predominantly or solely small retail units - a strategy many had used to drive up per-square-foot prices.

Still Cushman is banking on Irving Industrial Building's limited-edition appeal - a freehold property almost next to an MRT station.

On the other side of Tai Seng MRT Station, a unit of Mapletree Investments last year clinched a Business 2-White use site at a JTC tender. Its winning bid for the 30-year leasehold site worked out to $270.57 psf ppr. Mapletree has said it plans to develop the site into a high-specifications industrial project with some offices and retail outlets. When completed, one of Mapletree's Reits will have the first right of refusal to acquire the property.

That site is part of JTC's Paya Lebar iPark, aimed at attracting SMEs in the food and beverage, lifestyle, retail and light manufacturing sectors. Sakae Sushi, BreadTalk and Charles & Keith are among the well-known names that have set up operations in the park.

Irving Industrial Building, which is outside the iPark, currently comprises 67 industrial units. Owners controlling 85 per cent of the building's share value and strata area have agreed to the collective sale, which will be subject to approval by the Strata Titles Board. Hardware and metalworks company Lian Hong Seng, which occupies some space in the building, owns more than 50 per cent of share value.

The tender exercise for the collective sale closes on July 15.