CBRE brokers the largest single-asset industrial deal in Singapore in the last year

SINGAPORE (EDGEPROP) – CBRE announced on Jan 4 that it had brokered the sale-and-leaseback transaction for a 25-hectare site in Tuas South Avenue 14. The site Tuas South Avenue 14 accommodates an integrated industrial and warehouse facility with a total gross floor area of 1.6 million sq ft.

Tuas South Avenue 14

Image credit: Google Map

The site in Tuas South Avenue 14 was sold to LOGOS and 100% leased back to REC for 20 years for the conversion of polysilicon into wafers, solar cells and solar panels.

Mr Rimon Ambarchi, Executive Director of Industrial and Logistics Services, CBRE, said, “We are delighted to start the new year strongly with the announcement of Singapore’s largest single-asset industrial transaction in the last year. Sold at S$585 million to LOGOS via a sale-and-leaseback agreement, leading solar firm REC will continue to produce solar panels at this highly advanced facility in Tuas.”

He added: “We have been experiencing strong demand from a wide variety of institutional investors for high quality industrial real estate in Singapore. These investors are attracted by the relatively strong yields that are still available in this strong core market.”

The site in Tuas South Avenue 14 is located next to the future Tuas Mega Port, which when completed in 2040, will house all of Singapore’s future container activities and handle up to 65 million standard-sized containers, an increase from the current 40 million.

JTC said in its report last year that the supply pipeline for warehouses and single user factories is mainly in the West Region, while factory stock is concentrated in the West, North East and North Regions. The successful brokering of the mega-site at Tuas South Avenue 14 comes at a time when tapering supply is coming on stream from 2019 onwards. The average rents and prices are expected to stabilise across all segments with this tapering supply.

The business park segment is expected to continue to outperform the general market given steady demand, while logistics/warehouse rents could potentially see some upside by year-end on the back of an expected reduction in vacant stock.

Investments in industrial property market rose in popularity following the cooling measures imposed on the residential segment in 2011 and 2013. Unlike residential property, industrial property is typically not an option considered by most Singaporeans unlessthey are an investor or business owner.

The pool of local buyers for the industrial property market therefore is much smaller. Furthermore, buying an industrial property is more complex and varied. It is also less speculative compared with residential property segment.

An important differentiation is that additional buyer’s stamp duty (ABSD) is not applicable for buyers of industrial property. This is a major reason for swaying potential buyers towards industrial properties.

Another key difference in buying from the industrial property market is that buyers are not able to use their savings in their Central provident Fund (CPF) to fund their purchase unlike for a residential property probably as unlike homes, these purchases are deemed non-essentials. This essentially means buyers should have enough cash to pay the down payment.

If you are looking to purchase properties in Singapore, our team members and the mortgage consultants at can help you with affordability assessment and promotional loans. The services of our mortgage loan experts are free. Our analysis will give industrial property loan seekers better ease of mind on interest rate volatility and repayments.

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