AEW Selling Northern Singapore Industrial Building to Family Office for $117M

US fund manager AEW is selling an industrial asset in Singapore’s Woodlands area for between S$153 million and S$154 million ($115.9 million and $117.7 million), market sources confirmed to Mingtiandi on Friday.

The buyer of Admirax, a seven-storey light industrial building in the city-state’s far northern reach, is a family office, according to a person familiar with the deal who declined to identify the family or their geographic origin. Occupancy at the 2009-vintage facility exceeds 70 percent across a net lettable area of 476,480 square feet (44,266 square metres), the person said.

The deal is the third major industrial transaction in Singapore this month, after Frasers Logistics and Commercial Trust announced last week that it had agreed to buy an ESR warehouse near Tuas Port for S$140.3 million. Earlier in October, data centre operator GDS International agreed to buy a western Singapore warehouse from CapitaLand Ascendas REIT for S$112.8 million. News of the AEW transaction was first reported by the Business Times.

With the asset standing out as a property not developed on land acquired from Jurong Town Corporation — which regulates industrial development in Singapore and typically grants short land tenures — Galven Tan, chief executive of Knight Frank Singapore, which advised on the transaction, pointed to the deal as both a bet on the city-state and on a property with rare value.

“As an investment destination, Singapore remains pivotal to investors looking to invest in Asia,” Tan said. “Non-JTC industrial assets stand out as they offer compelling returns and we see strong continued interest from both institutions and privates.”

Former BlackRock Asset

Located at 8 Admiralty Street with frontage at the junction of Admiralty Road West and Sembawang Drive, Admirax features a food court and child-care centre and sits near the Seletar Expressway and Sembawang and Admiralty MRT stations. The site is on a 60-year leasehold from October 2000.

Boston-based AEW bought Admirax from BlackRock in early 2021 for S$142 million (then $107 million), with the asset management giant’s disposal coming less than three years after acquiring the property from Ascendas-Singbridge (now part of Capitaland).

Manhattan-based BlackRock had made enhancements to the building’s public areas, and AEW completed a further improvement programme in 2021 with upgrades to the main entrance, lift lobby, drop-off area and toilets, BT reported. Now the latter plans to exit its investment at a price working out to roughly S$323 ($245) per square foot of NLA.

AEW’s other Singapore property holdings include the office element of Chevron House, a 32-storey commercial tower at Raffles Place, which the fund manager purchased in 2019 for S$1.025 billion (then $754 million), and Westgate Tower in Jurong East, acquired in 2022 for S$680 million (then $488.5 million).

The divestment of Admirax comes just over three years after AEW announced the final closing of its fourth Asia Pacific value-add fund with commitments totalling $1.54 billion.

Rents Edging Up

The Singapore government announced Thursday that industrial rents in the July-September period rose 0.3 percent on a quarterly basis — the slowest rate since Q4 2021 — and 4.8 percent year-on-year, with occupancy holding steady at 89 percent.

Some 200,000 square metres (2.1 million square feet) of new industrial space is expected to be completed in the fourth quarter, and a further 1.6 million square metres is due to come on-stream in 2025. Annual supply and demand of industrial space averaged 900,000 and 500,000 square metres respectively over the past three years.

“While new supply of industrial space continues to come on-stream in 2024, occupancy rates are likely to remain stable,” said Jurong Town Corporation. “JTC will continue to monitor the market closely and support the needs of industrialists.”

Earlier this month, JTC revealed that CapitaLand Development made the top bid of S$368.9 million ($284.5 million) for an industrial development site in Kolam Ayer industrial estate, with the builder’s proposed project to serve food-related end-users.

The 44,107 square metre parcel at Kallang Way in the Macpherson area was made available in June with a 32-year tenure as part of the Singapore government’s biggest rollout of industrial land for sale in a decade.