Far East Organization Selling Western Singapore Warehouse for $89M

Far East Organization Selling Western Singapore Warehouse for $89M

Enterprise Logistics Centre at 2 Tuas View Place

The ramp-up logistics facility is set to benefit from the upcoming Tuas Megaport. (Source: Far East Organization)

Far East Organization has agreed to sell a logistics facility in Singapore’s Tuas district to a global pool manufacturer for S$120.6 million ($89.4 million), parting with its fifth and final asset from an industrial complex which it developed nearly three decades ago.

The Singapore developer is selling the Enterprise Logistics Centre at 2 Tuas View Place near the Tuas Port, to pool and toy distributor Intex Singapore, according to market sources, with that company operating as an affiliate of California-based Intex Recreation Corp.

The sale of the 327,000 square foot (30,379 square metre), two-storey warehouse comes just over three months after Tuas Port officially opened on 1 September, with the facility at the southwest tip of the city-state already handling as much freight as the Pasir Panjang Terminal in southern Singapore on its way to more than doubling that capacity by 2040.

“As Tuas is undergoing a major transformation, its proximity to Tuas second link and Tuas mega port, which is undergoing development to become the world’s largest fully automated port, makes the district even more attractive,” a spokesperson from the ERA Realty, which brokered the transaction told Mingtiandi on Friday, while declining to comment further on deal due to confidentiality terms.

Megaport Proximity

Far East Organization, a privately held developer controlled by the same family as Hong Kong’s Sino Land, is selling the industrial facility at a “reasonable price” of S$368.8 per square foot of net lettable area, according to representatives of ERA. The sale of the building had first been reported by the Business Times last week.

Far East Organization chief executive Philip Ng

Far East Organization chief executive Philip Ng

ERA pointed to the logistics project’s proximity to the megaport and its longer than typically available land tenure as adding to the asset’s appeal. While industrial land in Singapore typically carries 20-year land use rights, the Enterprise Logistics Centre has 33 years remaining on a 60-year leasehold that started in 1995.

The agreed compensation is 2.7 percent less than the S$124 million asking price stated in an online listing posted around 10 months ago, but is still nearly 5 percent more than the S$115 million stated when the project was marketed on the same website two years ago.

The 2007-vintage building on the site is currently fully occupied by five tenants whose respective lease terms are expiring in different periods, the sources said. The current occupiers are biotech firm Life Technologies Holdings and freight service company Skylift Consolidator, as well as third party logistics providers Sunbo Holding, Global Pallets Services and Tiong Nam Logistics.

Intex, which produces and distributes plastic products like above-ground swimming pools, airbeds, lawn furniture and toys, is said to be keeping the warehouse for its own use, according to the Business Times report.

In addition to its proximity to Tuas Port, the facility also benefits from access to the Second Link Bridge, which connects the city-state with Malaysia’s Johor state.

Prices Picking Up

Disposing of the Enterprise Logistics Centre means Far East will have disposed of all five facilities it built on the 1.04 million square foot site it bought in 1995 for S$73.07 million.

The other four industrial properties, namely Westlink One, Westlink Two, Linkpoint Place and a factory at 15 Tuas View Place, had previously been sold on an individual basis.

Upon closing its latest deal, Far East’s portfolio will have at least four projects left within the Tuas planning area, according to its website. These include The Westcom industrial facility at Tuas South Ave 6, as well as the four-storey Index building at Tuas South Ave 3. Both facilities are roughly 10 minutes’ from the upcoming Tuas Megaport.

The other two facilities in the port district are a pair of single-storey warehouses at 51 Tuas View Link and 20-40 Tuas South Street 1, offering 324,000 square feet and 608,000 square feet of leasable floor space, respectively.

Prices for industrial properties in Singapore have risen for eight straight quarters since the final three months of 2020 according to data from the city-state’s JTC Corp, and ERA expects demand for logistics space in Tuas to continue to rise as the megaport opens in phases over the next two decades.

“We believe that the strong demand will continue in some of the industrial submarkets such as logistics, freehold, and leasehold industrial developments sitting on private land, especially for the rare freehold industrial developments,” said Steven Tan, managing director for capital markets and investment sales with ERA. “The freehold industrial assets would appeal to family offices for capital appreciation and preservation, and developers for land-banking and redevelopment reasons.”

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