M&G Real Estate has agreed to acquire four car showrooms in Singapore from auto distributor Jardine Cycle & Carriage (JC&C) for an undisclosed sum, according to industry sources who spoke with Mingtiandi.
UK-based M&G signed a sale and purchase agreement with the car sales unit of Hong Kong-based Jardine Matheson on Wednesday last week to purchase the four properties covering a combined 889,354 square feet (82,623 square metres) of leasable space in urban-fringe locations, according to documents seen by Mingtiandi.
Currently used as auto showrooms, service centres, workshops and warehouses, all assets will be leased back for at least 10 years to the SGX-listed auto distributor.
The deal comes as UK-based asset manager M&G ramps up its operations in Asia Pacific this year with senior hires and a string of acquisitions in Singapore, Japan and South Korea since the start of 2022.
$18.3M in Annual Income
The acquisition, which has yet to close, will add four properties generating S$25.9 million ($18.3 million) in annual rental income to M&G’s portfolio in the region, with a weighted average period to lease expiry of 12 years.
Included in the portfolio is JC&C’s regional headquarters at 239/241 Alexandra Road in Bukit Merah. The four-storey building spans 201,057 square feet of floor area with the ground level used as a showroom for luxury and mass-market car brands like DS Automobiles of France, Kia and Mitsubishi. Situated amid a residential enclave near Redhill MRT station, the property also houses after sales service centres for the car brands.
The second asset is just a few minutes away at 301 Alexandra Road, where a seven-storey facility is devoted entirely to Mercedes-Benz, providing a showroom, workshop and office space for the luxury marque, along with a car park and a cafe.
M&G’s purchase of the two Alexandra properties, which account for almost 70 percent of the portfolio’s rental income, comes with a 10-year leaseback term with an option to extend for another 5 years.
The area is a 10-minute walk from the Queenstown MRT station and around 15 minutes’ drive to the central business district.
In addition to the Alexandra assets, M&G is also picking up a property further west, near Jurong Lake District. Included in the JC&C portfolio is 209 Pandan Gardens, a 356,803 square foot industrial complex comprising a two-floor building and a pair of four-storey blocks housing showrooms, service workshops, car parks and ancillary offices.
The fourth asset is 188 Pandan Loop, a two-level building with a car park located five minutes’ drive south of 209 Pandan Gardens. Located within an industrial estate near Singapore’s west coast the Pandan Loop facility has a leasable area of 132,149 square feet.
The leaseback terms for both Pandan assets are expected to expire once their land tenures end in 2038.
An M&G spokesperson declined to comment when contacted by Mingtiandi. It is understood that CBRE brokered the transaction but representatives of the property agency also declined to comment.
M&G Expands Asia Presence
M&G’s Singapore industrial deal adds to a string of Asia acquisitions by the asset manager this year.
Earlier this month M&G picked up the Minato Mirai Center office building in Yokohama, Japan in a JPY 100 billion ($700 million) deal on behalf of its M&G Asia Property Fund.
The Yokohama transaction followed shortly after the UK firm committed up to $350 million in fresh funding to an existing joint venture with industrial giant ESR, with a goal of developing logistics properties in Japan worth over $1 billion in gross asset value.
In September, M&G also brought aboard two senior hires in Singapore and Seoul with the company pointing to the need to expand its Asia Pacific team.
In an online briefing in January, Richard van den Berg, fund manager of the M&G Asia Property Fund, pointed to the industrial and residential sectors as his top picks in the region, while M&G’s research head Eunice Khoo picked Australia, Japan and Singapore as her top real estate investment locations in the region.