A light industrial building in Singapore’s Paya Lebar area is being sold for S$81.18 million ($60.6 million) as investors continue to pay up for shed sites in the land-scarce city-state.
A tender for the collective sale of the Noel Building, an eight-storey freehold property at 50 Playfair Road in Tai Seng has been awarded to an unnamed buyer, which plans to redevelop the strata title industrial block into a modern food processing facility, Edmund Tie, the property’s sole marketing agent, announced on Thursday.
The property, which is zoned for ‘Business 1 – White” use, allowing owners to develop it for a broad range of uses, is changing hands for 16 percent more than the guide price of S$70 million in the tender launched last month. Edmund Tie pointed to the site’s proximity to food-dedicated facilities like the headquarters of BreadTalk just across the street, and its location within a few blocks of the Tai Seng MRT station, as boosting its appeal.
“The tender exercise for the site was hotly contested, attracting overwhelming interest from developers, end-users and investors, both local and foreign alike,” said Swee Shou Fern, head of investment advisory at Edmund Tie. “The positive tender outcome is indicative evidence of investors’ sustained strong confidence in the Singapore real estate market, particularly in properties with robust attributes.”
Noel Gifts Exits at a Premium
The winning bid for 50 Playfair Road works out to S$866 per square foot of its maximum buildable area of 93,775 square feet (8,712 square metres), and should the sale be completed at that price, the owners are expected to receive around S$1.65 million to S$6.22 million per unit in gross sale proceeds.
SGX-listed Noel Gifts International owns 10 units in the property which bears its name, and based on an earlier statement, the firm will be using proceeds from the disposal for potential acquisitions, future investments and as general working capital of the business.
The property sits at the corner of Playfair and Harper roads beside the Grantral Mall @ MacPherson, which was built on the site of the former Citimac industrial complex.
That adjacent site was bought by a family surnamed Zhao from China’s Guangdong province at a price of S$430.1 million, or S$1,047 per square foot per plot ratio.
Mingtiandi understands the winning bidder for 50 Playfair Road is not a known player in Singapore’s real estate industry but that it is planning to set up a company in the city-state.
Rajah & Tann acted as legal counsel on the transaction. Parties involved in the deal declined to disclose further details while Noel Gifts had not commented by the time of publication.
Redeveloping Paya Lebar
The collective sale of 50 Playfair Road follows the February sale of the J’Forte Building food processing facility, which is located less than one kilometre away across Upper Paya Lebar Road.
The Boustead Industrial Fund, which counts SGX-listed Metro Holdings, local property firm Boustead Projects, and an institutional investor as its backers, paid S$98.8 million for the eight-storey building at 26 Tai Seng Street, which serves as the headquarters of the seller, Suki Sushi, as well as being home to Singaporean restaurant operator TungLok Group.
The Tai Seng Street properties are positioned to benefit from the government’s redevelopment scheme for the nearby Paya Lebar airbase, as the state plans to transform the facility into a new town incorporating commercial, industrial and residential developments, as well as recreational areas.
Singapore’s industrial market continues to gather steam with both rents and prices having risen for three consecutive years
A report from Colliers shows an industrial price index for the city-state rose by 1.4 percent in the third quarter from the preceding three months, reaching its highest level since the first quarter of 2016.
In the leasing market, an index of industrial rents rose by 2 percent during the July through September period, compared to the preceding three months, after the second quarter saw a 2.1 percent rise from the first three months of the year.