Tuesday, April 21, 2009

BTO: Jurong Tech's factory building is up for auction

Business Times - 22 Apr 2009

Jurong Tech's factory building is up for auction

Company's judicial manager is offering it on sale and leaseback deal



A TWO-STOREY Tuas factory building owned by Jurong Technologies Industrial Corp has been put up for auction by the company's judicial manager Deloitte & Touche.


The property, at 18 Tuas West Avenue, is being offered at Colliers International's auction on April 29.


BT understands the property could be worth more than $3 million. The factory, which is being offered as a sale and leaseback deal, is on a 75,299 sq ft site with a remaining lease of about 17 years.


Colliers will also auction a total of eight apartments and five shops at Upper Serangoon Shopping Centre.


These units are understood to be part of a bigger batch of units in the ageing freehold development that had been offered for sale by tender in 2007 by the building's developer, Hong Huat Development Co, which is in voluntary liquidation.


The eight apartments on the top floor of the six-storey building will go under the hammer as a single lot at Colliers' upcoming auction.


Sources say that the opening price will be about $3 million to $3.1 million.


At $3 million, the price reflects about $261 psf of strata area and a net yield of about 3.5 per cent, based on the existing lease on the units, which expires in about a year. All eight apartments are leased to a company.


The shop units, which are being sold individually, are leased to various tenants. The leases expire from around the middle to end of this year.


Opening bids for the shop units are expected to be in the region of $700 psf, which would reflect net yields of about 4 to 5 per cent based on existing tenancies. Besides collecting a rental return, a key attraction for potential buyers of the shops and apartments at Upper Serangoon Shopping Centre would be the prospects of a potential collective sale of the complex.


Colliers is also offering at its auction two mortgagee sale properties. One is a ramp-up flatted factory unit at Tradehub 21 at Boon Lay Way. Tradehub is a site with a remaining lease of about 54 years.


The unit is expected to fetch about $600,000. The other mortgagee sale is of a three-storey freehold detached house, 5B Lim Tua Tow Road (off Upper Serangoon Road).


The property received offers above $2 million at an auction earlier this year, but the mortgagee bank declined to sell at the time.


It could be more flexible now, given the poorer economic outlook, auction market watchers suggest.


A 13th floor apartment at the freehold Orchard Towers - where a collective sale was once planned - will also go under the hammer at next Wednesday's auction. The 1,970 sq ft unit has an indicative price of about $2.2 million to $2.4 million.


Investors keen on buying strata shop units in the city can consider two basement units at High Street Centre and a couple of third-floor units at Sim Lim Square. These properties have been put up for sale by their respective owners.


Some $18 million worth of properties was transacted at auctions in Singapore in the first quarter of this year, more than three times the $5.4 million notched up in the preceding quarter and also surpassing the $9.5 million in Q1 last year.

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