Perennial Real Estate Holdings is taking on its first ever business park project as the Singapore-based developer on Friday announced its S$118 million ($88.4 million) purchase of a project in the city’s Jurong Lake district.
The developer controlled by Singaporean billionaire Kuok Khoon Hong has acquired the former Big Box warehouse mall in the Jurong Gateway commercial area in western Singapore with plans to invest more than $70 million more to redevelop the property under the name of Perennial Business City, according to a statement.
“The acquisition of the former Big Box marks a major milestone for our company with the expansion of our real estate portfolio to include business parks,” Perennial CEO Pua Seck Guan said. “We are pleased to have the opportunity to redevelop the asset to capitalise on the burgeoning demand for business parks,” Pua added.
The company plans to convert the former retail asset into a 1.5 million square foot (139,354 square metre) office project as major tech firms and other multinationals increasingly favour Singapore asa regional headquarters location.
Converting a Failed Mall
Perennial, which went private this year in a buyout led by its chairman and CEO, together with a fund managed by mainland investment giant Hopu, had earlier signed a put and call option agreement with the receivers for Big Box and acquired the property by exercising the call option under that deal.
The developer will hold a 51 percent stake in the project, with the remaining shareholding to be owned by HPRY Holdings Limited, the investment vehicle of its chairman, Kuok Khoon Hong, along with other investors.
Currently zoned for light industrial use, Perennial has obtained confirmation from Singapore’s Jurong Town Corporate for the 606,600 square foot site to be converted for business park operations. Big Box had gone into receivership in 2017 and JLL kicked off a tender for the sale of the company’s site at 1 Venture Avenue in April of last year.
Perennial now expects to expand the retail mall’s gross floor area from 1.4 million square feet to yield a net lettable are of 1.1 millon square feet, in a process expected to be completed during the fourth quarter of 2021.
The developer has appointed CBRE to begin marketing space in the project to potential tenants in the infocomm technology, biomedical sciences, fast-moving consumer goods and financial sectors, according to the statement.
Aiming at Tech Occupiers
“Perennial Business City has the advantage of a modernised design and high specifications, of which the generous floor to ceiling height of four to five meters will be one of the potential draws to companies seeking to have high-play structures within the business space to appeal to the younger workforce,” said CBRE Singapore managing director Moray Armstrong.
With mainland tech giants Alibaba, Tencent and Bytedance all having expanded their presence in Singapore in recent months, Armstrong pointed to this demand from information services firms as a potential source of leasing demand.
“On the back of recent announcements of Chinese technology firms establishing their regional offices in Singapore and the ongoing transformation of the Jurong Lake District which will open new markets and business opportunities in the near future, we are confident that Perennial Business City will be the project of choice for businesses in the infocomm technology, biomedical, telecommunications and medical services industries,” Armstrong added.
A consortium led by Perennial already signed an agreement in May of this year to sell a 50 percent stake in Singapore’s AXA Tower to Alibaba for S$1.68 billion. The Hangzhou-based e-commerce firm is already a tenant of the tower in the Lion City’s central business district, and now intends to redevelop the property into an integrated complex with commercial, hotel and residential components.
In October, Bytedance, the parent of video sharing app Tiktok, signed a lease for over 60,000 square feet at One Raffles Quay in Singapore, after deciding to make the city its Asian hub outside of China.
During that same month, Tencent, which produces the WeChat app, opened its first office in Singapore, with plans to make the city its Southeast Asian headquarters.