PGIM Teaming Up With Northstar to Buy Singapore Industrial Site From FEO for $95.2M

PGIM Real Estate is adding another Singapore property to its portfolio with the Prudential affiliate teaming up with a recently established investment manager in a deal to purchase an industrial facility near Tuas port from Far East Organization, according to an announcement early Monday.

Together with Northstar Capital, which was established late last year by a pair of former ESR and Logos executives, PGIM is buying 51 Tuas View Link for S$121 million ($95.2 million) with plans to develop a ramp-up logistics facility spanning 1.1 million square feet (102,193 square metres) of gross floor area. 

With Singapore having seen a number of global investors snatching up industrial assets in the city-state in recent months, David Fassbender, deputy head of Asia Pacific for real estate and senior portfolio manager of Asia-Pacific value-add strategies for PGIM, pointed to the deal as play on Singapore’s shortage of logistics space.

“Amidst a rebound in real estate value, persistent supply shortages and growing demand for capital to meet sustainability requirements, value-add opportunities across Asia Pacific offer compelling potential for income growth,” Fassbender said in a statement. “Our partnership with Northstar on the redevelopment of 51 Tuas View Link, a rare large prime logistics space in Singapore, underscores our strategy to secure investments with strong fundamentals, drive operational efficiency and create long-term value for investors.”

Going Big in Tuas

Currently occupied by a pair of 2014-vintage, single-storey buildings, PGIM and Northstar plan to develop a five-storey logistics facility on the approximately 457,000 leasehold site, and are aiming to achieve a platinum rating under Singapore’s Green Mark regimen for sustainable buildings. 

At the expanded project size of 1.1 million square feet, PGIM and Northstar are paying the equivalent of S$110 per square foot of built area for the site, which has land-use rights through 2056 and is zoned Business 2, which allows for general and heavy industrial purposes. PGIM is investing in the project through its flagship Asia Pacific value-add real estate strategy. 

The deal comes just after PGIM confirmed that it had backed the S$132 million acquisition from Singapore Land of the Stamford Court commercial complex near Singapore’s city hall through a joint venture with local player Elevate Capital Group, with that deal under PGIM’s core-plus strategy. 

“As one of the prime logistics facilities in Singapore, 51 Tuas View Link offers a combination of scale, connectivity and land tenure that makes it ideally positioned to meet the evolving needs of today’s tenants,” Northstar co-CEO Bart Coenraads said. Together with PGIM, we look forward to developing a modern, future-ready facility, contributing to the continued growth of Singapore as the region’s leading logistics hub.”

Coenraads had announced Northstar in November of last year, co-founding the Singapore-based industrial specialist together with fellow ESR and Logos veteran Chin Yarng after having previously served as group head of funds management with ESR.

Demand for Large Projects

”The sale of 51 Tuas View Link demonstrates that capital continues to seek scale, flexibility and long-term optionality in Singapore’s industrial market,” said Tan Boon Leong, industrial sales lead at Colliers Singapore, which brokered the transaction via a competitive bidding process.

Demand for Singapore industrial space was evident in December when Brookfield Asset Management agreed to buy a 2.4 million square foot industrial portfolio from ESR-REIT for S$338 million. During that same month JD Property and Rava Partners-backed EZA HIll closed on a deal to acquire four industrial facilities in the city-state from CapitaLand Ascendas REIT for S$306 million.

With Singapore regulators typically granting industrial land leases of 20-30 years, Colliers pointed to the scarcity of factory or warehouse sites outside of the JTC Corp universe as helping drive demand for 51 Tuas View Link.

“Large, private leasehold non-JTC B2 sites are increasingly hard to come by, especially those that offer both immediate warehouse utility and clear headroom for intensification,” Colliers’ Tan said. This transaction reinforces the West’s strategic relevance as Singapore’s logistics and industrial ecosystem continues to evolve.”