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THE OPPORTUNITY
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KEY INVESTMENT HIGHLIGHTS
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PROPERTY OVERVIEW
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ORIGINAL PROJECT TEAM
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PROPERTY LOCATION
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FLOOR PLANS AND SITE PLAN
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TECHNICAL SPECIFICATIONS
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PROPOSED LEASEBACK TERMS
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FINANCIAL ANALYSIS
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SALES OFFERING PROCESS
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CONTACT DETAILS
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MARKET OVERVIEW
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PROPOSED EOI TEMPLATE
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Jones Lang LaSalle (“JLL”), on behalf of Advanced Micro Devices (Singapore) Pte Ltd., (“AMD” or “Vendor”), is pleased to present the sale of 508 Chai Chee Lane (“Property”). The Property is a 7-storey light industrial building with 2 basement storeys, and benefits from a range of amenities including a gym, rooftop garden, canteen, auditorium, and a tennis court. It is strategically located next to the Pan Island Expressway (“PIE”) enjoys excellent signage and branding exposure, and is about 5 minutes’ drive from Bedok and Kembangan MRT Stations on the East-West Line. Held on a 30 + 29 year leasehold tenure from Jurong Town Corporation (“JTC”), the Property comprises 328,000 sq ft of Gross Floor Area (“GFA”), and is currently occupied by AMD. This offering provides an excellent opportunity to acquire 100% interest of a quality industrial building, with a long term lease to AMD for a portion of the property.
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LONG TERM LEASEBACK AND MARKET RENT UPSIDE POTENTIAL- Long-term leaseback to AMD providing initial income stream and potential access to increasing market rentals for balance of space in building. STRATEGICALLY LOCATED - Proximity to the Central Business District (CBD) and Changi Airport is further enhanced by its accessibility to Bedok and Kembangan MRT stations and major expressways. Prominent frontage and visibility to pedestrians and vehicular traffic providing excellent signage and branding opportunities.! STRONG MARKET FUNDAMENTALS - Demand for industrial space is expected to grow on the back of an improving economy and positive market fundamentals. The manufacturing sector grew by 3.1% in 4Q12 and the Ministry of Trade and Industry currently expects Singapore’s GDP to grow by 1.0% to 3.0% in 2013. RISING CAPITAL VALUES FOR INDUSTRIAL PROPERTY- Growth of capital values for industrial space strengthened in the first three months of 2013 following a period of static growth. Capital values grew by an average of 2.9% over the previous quarter due to sustained demand for quality industrial space. HIGH QUALITY SPECIFICATIONS- Highly efficient and regular floor plates with side core design for maximum efficiency. Floor loading, ceiling height, power and cooling provisions designed for engineering, R&D, production and ancillary office uses.
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Address
508 Chai Chee Lane, Singapore 469032
Building Description
7-storey light industrial building with 2 basement storeys
Completion Date
2nd December 2002
Lot Description
Lot 06084K of Mukim 28
Land Tenure
30 + 29 years w.e.f. 16 April 2001
Land Use Zoning
Business 1
Permitted Use
IC Chips Test, Mark & Pack complete with development of production and manufacturing activities or processes only
Plot Ratio (Master plan 2008)
2.50
Existing Approved Plot Ratio (current as-built) 2.88 (fully paid DC charges for additional GFA) Land Area
113,689.5 sq ft
Current GFA
327,574.7 sq ft
Current NLA
252,975.5 sq ft
Stacking Plan
Level!
GFA ! (sq ft)!
NLA ! (sq ft)!
Roof!
3,552.8!
- !
L7!
28,426.6!
12,497.0 !
Gym, Rooftop Garden, Canteen, Auditorium, Tennis Court, M+E Plant !
L6!
47,007.0!
40,354.2 !
Office !
L5!
47,012.4!
39,460.8 !
Office, Engineering Labs!
L4!
47,291.2!
39,934.4 !
Office, Engineering Labs!
L3!
47,280.5!
39,729.9 !
Office, Engineering Labs!
L2*!
17,503.7!
14,574.5 !
Mezzanine Office!
L1*!
56,443.1!
40,591.0 !
Guardhouse, Reception, Engineering Labs, Data Center, Warehouse!
B1!
29,933.9!
25,833.6 !
Engineering Labs, Parking!
B2!
3,123.4!
-!
Total!
327,574.7!
252,975.5 !
Current Use! M+E Plant !
Parking ! !
*L1 & L2 incl. Mezzanine Floors
Parking
B1: 44 motorcycle lots B2: 118 car parking lots L1: 17 car parking lots + 3 bus bays
Loading / Unloading Bays
5 bays with dock levellers for 20 footer access
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Main Contractor
Kajima Overseas Asia
Architect
WP Architects
M+E Consultant
JM Pang & Seah Pte Ltd
Civil & Structural Engineer
HSK & Associates
Quantity Surveyor
WT Partnership
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STRATEGICALLY LOCATED PROXIMITY TO CBD AND CHANGI AIRPORT ENJOYS EXCELLENT SIGNAGE AND BRANDING EXPOSURE
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MAP NOT TO SCALE
The Property is located at 508 Chai Chee Lane in the East Region of Singapore. It is strategically located next to the PIE, an established expressway which provides connectivity from east to west across the island. Changi International Airport is approximately 10 minutes’ drive from the property to the east and the Central Business District approximately 20 minutes’ drive to the west. The Property is also within close proximity to two MRT stations, Bedok and Kembangan, which are along the east-west line, both within a short 5 minute drive providing a direct link to the airport, Singapore Expo and Pasir Ris to the east and Raffles Place, Buona Vista and Jurong East to the west. The immediate vicinity of the Property comprises mainly public residential estates as well as several industrial properties and estates including the Kaki Bukit Industrial Estate and the Bedok Industrial Estate which is adjacent to the Property. The upcoming EuHabitat condominium and Bedok Mall and Bus Interchange are located within 5 minutes’ drive of the Property.
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Floor Plans and site plans !
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Incoming Power
4 incoming power feeders transmitted at 22KV with a total capacity of up to 25 MVA
Generator Power
2 x 750 KVA diesel generators
UPS
UPS installed for Data Centre, Security and Fire Command Centre
Cooling
Centralized AC for whole building, with Precision Air-Conditioning Unit for production areas  11 cooling towers, 4 x 700 RT building chillers, 1 x 750 RT building conversion chiller, 5 x 375 RT process cooling water chillers
Fire Protection
Comprehensive fire protection system including smoke detectors, fire alarms, wet sprinklers and FM-200 system for Data Center only.
Security
External: 1.8 m perimeter fencing with sensors, guardhouse and vehicle barriers Internal: Visitor management systems, turnstiles and card access controls
Lifts
2 x passenger lifts: 1360 kg/ 20 pax 1 x passenger lift: 3000 kg/ 44 pax 1 x service lift: 5000 kg 1 x fireman lift: 3000 kg/ 44 pax
Floor to Ceiling Height
B1 & B2: 3.5 m L1 warehouse: 9m L1 lobby & L2: 4.5m L3 to L7: 5.5m
Floor Loading
B1 & B2: 2.5 KN/ sqm L1: 15 KN/ sqm L2: 5 KN/ sqm L3 to L6: 10 KN/ sqm L7: 5 KN/ sqm
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The Property is offered with the benefit of a long-term partial leaseback to AMD. AMD would like Interested Parties to submit EOIs for both the preferred Option 1 and, if possible, the alternative Option 2 as described below: Tenant
Advanced Micro Devices (Singapore) Pte Ltd.
Demised Premises
Preferred Option 1: AMD to lease TEM Lab on L1 and the whole of L4, L5 and L6 (based on total rentable area of 120,707.50 sq ft) Alternative Option 2: AMD to lease TEM Lab on L1 and the whole of B1, L5 and L6 (based on total rentable area of 106,606.70 sq ft)
Lease Commencement Date
Date of completion of the Sale & Purchase Agreement
Initial Lease Term
10 years
Initial Gross Rent
SGD 2.60 psfpm, inclusive of normal hours air-con (Weekdays from 8am to 6pm, Weekends from 8am to 1 pm)
Gross Rent Reviews
Fixed escalations of 2.0% p.a.
Renewal Options
Option to renew for 2 further terms of 4 years and 3.5 years by Tenant providing not less than 12 months’ notice prior to expiry.
Renewal Base Rent
The Renewal Gross Rent shall be reviewed to market at the expiry of each lease term, subject to a cap of no more than 15% increase from the preceding year’s rent.
Holdover Rights
AMD shall have the right to holdover for a period of up to 6 months at the then passing Gross Rent.
Subletting & Assignment Rights
Subject to JTC’s consent, AMD shall have the right to sublet or assign any part of the premises to its subsidiaries or associated companies without the Landlord’s consent, and to any 3rd parties subject to Landlord’s consent, which shall not be unreasonably withheld.
Signage Rights
AMD to retain the building signage at no additional costs
First Right of Refusal
AMD will have the first right to lease any additional space in the building
Parking
AMD shall have exclusive use of the parking facilities on a pro-rata basis, at the following rate: Car parking: SGD 100 per lot pm Motorcycle Parking: SGD 30 per lot pm
Outgoings and Other Costs
Utilities: To be borne by AMD based on actual consumption at cost. Maintenance: To be borne by Landlord Property tax and insurance: To be borne by Landlord Land Rent or Land Premium: To be borne by Landlord
Reinstatement
At the expiry of the lease, or extension thereof, AMD shall not be responsible for any reinstatement.
Each party will pay its own legal, administrative and stamp duty costs incurred for the sale, Legal, Administrative and Stamp purchase and leaseback. Duty AMD to bear the stamp duty on the lease.
Note: Actual terms and conditions will be contained in the definitive documents to be entered into by AMD and the successful party at the time of transaction closure.
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The Property is sold with a long-term partial leaseback to AMD, based on either Option 1 or Option 2 as described in the Proposed Leaseback Terms. Option 1 Floor
Current Usage
Option 2
AMD Premises 3rd Party Tenants AMD Premises 3rd Party Tenants (sf) (sf) (sf) (sf)
L7
Auditorium, Gym, Canteen
L6 L5
Total NLA (sf)
-
12,497.0
-
12,497.0
12,497.0
Office
40,354.2
-
40,354.2
-
40,354.2
Office, Engineering Labs
39,460.8
-
39,460.8
-
39,460.8
L4
Office, Engineering Labs
39,934.4
-
-
39,934.4
39,934.4
L3
Office, Engineering Labs
-
39,729.9
-
39,729.9
39,729.9
Office, Warehouse
-
14,574.5
-
14,574.5
14,574.5
-
9,375.4
-
9,375.4
9,375.4
958.0
30,257.6
958.0
30,257.6
31,215.6
-
25,833.6
25,833.6
-
25,833.6
120,707.5
132,268.0
106,606.7
146,368.9
252,975.5
L2
L1 Mezzanine Warehouse Engineering Labs, Data Center, Warehouse, Parking Office/ Engineering Labs, B1 Parking Total NLA (sf) L1
Option 1: AMD to lease TEM Lab on L1 and the whole of L4, L5 and L6. Option 2: AMD to lease TEM Lab on L1 and the whole of B1, L5 and L6.
The projected rental schedule is set out as follows: Premises
Initial Gross Rent/ Parking Revenue
AMD Leaseback Premises
SGD 2.60 psfpm
Office/ Engineering Labs/ Date Center
L1 to L6: SGD 3.00 psfpm B1: SGD 2.00 psfpm
Warehouse
SGD 2.00 psfpm
Others
Auditorium: SGD 2.00 psfpm Gym: SGD 2.00 psfpm Canteen: SGD 1.80 psfpm
Parking
Car: SGD 100 per lot pm Motorcycle: SGD 30 per lot pm
The above Gross Rent assumes provision of normal hours AC is included (Weekdays from 8 am to 6 pm, Weekends from 8am to 1 pm).
The current schedule of outgoings is set out as follows: Total Cost (SGD)
Total Cost (SGD psfpm)
Fixed/ Contracted Maintenance Cost
749,080
0.25
Facility Management Contract
481,606
0.16
1,140,000
0.38
Budget 2013
Consumables/ Variable Repair Cost Sinking Fund Sub Total Property Tax Total The above schedule is indicative and based on AMD's Year 2013 budget. Property tax is based on IRAS's assessment for Year 2013
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60,000
0.02
2,430,686
0.80
382,000
0.13
2,812,686
0.93
An indicative five-year cash flow model has been prepared which projects the net operating income profile of this Opportunity. The purpose of this is to evaluate the relative financial strength of the investment, taking into account the potential income from AMD and other tenants. The projected cash flows are projections and may be subjected to change based on future market conditions.
Preferred Option 1 AMD
Year 1 3,766,074
Year 2 3,841,395
Year 3 3,918,223
Year 4 3,996,588
Year 5 4,076,519
3rd Party Tenants
2,620,370
3,560,035
3,560,035
3,720,423
3,777,938
164,388
167,676
171,029
174,450
177,939
Operating Expenses
(2,818,205)
(2,825,998)
(2,882,518)
(2,940,168)
(2,998,972)
Net Operating Income (NOI)
3,732,626
4,743,109
4,766,770
4,951,292
5,033,425
Alternative Option 2 AMD
Year 1 3,326,128
Year 2 3,392,650
Year 3 3,460,503
Year 4 3,529,713
Year 5 3,600,308
3rd Party Tenants
2,681,496
4,351,163
4,351,163
4,515,292
4,617,489
164,388
167,676
171,029
174,450
177,939
Operating Expenses
(2,818,205)
(2,825,998)
(2,882,518)
(2,940,168)
(2,998,972)
Net Operating Income (NOI)
3,353,807
5,085,492
5,100,178
5,279,287
5,396,764
Parking
Parking
1. Assumes stablized income from Year 2 onwards. 2. The above projections do not include any administrative fees, consultant fees, stamp duties, sublet fees, capital expenditure or any other miscellaneous costs. 3. The above projections do not include payment of annual land rent or land premium.
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JLL is seeking Expressions of Interest (“EOI”) from parties interested in acquiring the Property outlined in this information memorandum (“IM”). This IM is produced solely as a general guide for interested parties (“Interested Parties” and each an “Interested Party”). It does not constitute valuation advice or an offer. Further notice is given that: • All dimensions, figures, opinions and other details have been prepared in good faith from information furnished to JLL by the Vendor and their consultants and are believed to be correct as at the date of publication. The information in this IM may not have been independently verified by JLL. •
Interested Parties should not rely on any material contained in this document as a statement or representation of fact and should satisfy itself as to its correctness and accuracy by such independent investigation as it or its advisors may deem appropriate.
•
No person employed by the Vendor or JLL or any of their respective associated companies have any authority to make or give any representation or warranty whatsoever in relation to the Property or the proposed sale and lease thereof, subject only to written warranties and guarantees (if any) set forth in the sale and purchase agreement (“Sale and Purchase Agreement”) to be entered into by the Vendor and the selected party (“Selected Party”).
•
In the event of any discrepancy between the information in this IM and information forming part of the Sale and Purchase Agreement to be entered into by the Vendor and Selected Party, the said Sale and Purchase Agreement shall take precedence.
•
The parties proceed on the basis that the Selected Party will be legally committed following the submission of the Sale and Purchase Agreement executed by the authorised signatory of the Selected Party.
•
•
The Vendor will not be legally committed to sell the Property to the Selected Party unless and until the Vendor counter signs the Sale and Purchase Agreement, and in such a case, the sale and purchase of the property will be binding only in accordance with the express terms of the Sale and Purchase Agreement counter signed by the Vendor. The EOI must be signed by an authorized employee or representative who has the authority to make a binding commitment on behalf of the interested party as to all elements of the EOI.
• Note that any sale is subject to JTC approval and any other necessary governmental approvals. •
All currency amounts are in Singapore Dollars unless stated otherwise.
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Expressions of Interest (“EOI”) Jones Lang LaSalle is seeking Expressions of Interest (“EOI”) for the acquisition of 100% interest in the Property, by 5pm (Singapore time) on Friday 7th June 2013. All EOIs are to be in writing and addressed to the following: “508 CHAI CHEE LANE EOI” Jones Lang LaSalle Property Consultants Pte Ltd 9 Raffles Place #39-00 Republic Plaza Singapore 048619 Attn: Mr Bob Tan Interested Parties submitting an EOI are to provide the following information in their submission: • Offer Price – The offer price must be stated in Singapore Dollars. Any conditions or qualifications which the Interested Party would attach to such offer price and any major assumptions underlying the offer price must be stated. Offers must state a headline purchase price for the total underlying value of the Property. • Interested Party’s Details – The precise identity and nature of the legal entity which will purchase the 100% interest, together with details of the place of incorporation and ownership structure of that legal entity. •
Capacity to Complete – Full details of Interested Party’s capacity to complete, including in particular, the source and structure of funds, evidence of the financial status and details of any ultimate parent company. If the Interested Party wishes to use a special purpose entity to complete the purchase, please include details of any security for performance of the purchasing entity’s obligations.
•
Conditions and Approvals – Full details of any conditions that will need to be satisfied prior to the Interested Party either exchanging or settling a sale and purchase. For example, details and timing of the following: - Prospective purchaser’s board or parent board’s approval - Foreign investment Review Board approvals - Other third party approvals Full details of any other conditions that are required must also be disclosed at this time. EOIs must be signed by an authorised officer of the acquiring entity.
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No Obligation to Accept EOI The Vendor reserves the right not to accept any EOI, without limitation, and is not obliged to accept the EOI with the highest consideration. The Vendor may, in its absolute discretion, negotiate with any Selected Party who submits an EOI, change the sale process, terminate negotiations at any time prior to the execution of a binding contract for the sale and purchase of the Property, enter into a binding contract without prior notice to other Interested Parties or Selected Parties and at any time prior to the execution of a binding contract for the sale and purchase of the Property, may withdraw the Property from the market. No person is entitled to any recourse, remedy or redress against the Vendor if it exercises the discretions mentioned above. The Vendor is not responsible for any costs or expenses incurred by any Interested Party in preparing and lodging an EOI or in carrying out due diligence and other investigations and analysis in relation to the Property or the potential transaction of acquiring the Property. Proposed Timeline It is expected that the sale process will proceed in accordance with the following timetable. All dates are subject to changes. Â No later than 7th Jun 2013 (5 pm Singapore Time) Submission of EOI 14th Jun 2013
Notification to Selected Party to commence formal Due Diligence
17th Jun 2013 – 5th Jul 2013
Due Diligence Period
No later than 5th Jul 2013 (5 pm Singapore Time)
Submission of Best and Final Offers
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JLL is seeking Expressions of Interest (“EOI”) from Interested Parties for the acquisition of 100% interest in the Property. The deadline for non-binding EOIs is 5.00 pm (Singapore Time) on Friday, 7 June 2013. A detailed information memorandum is available upon request and with execution of an appropriate confidentiality undertaking. Please direct all enquiries to: Ashish Manchharam CEA Registration No. R040279Z +65 6494 3969 ashish.manchharam@ap.jll.com
Bob Tan CEA Registration No. R021964B +65 6494 3879 bob.tan@ap.jll.com
Rohit Hemnani CEA Registration No. R021956A +65 6494 3875 rohit.hemnani@ap.jll.com
Nicholas Ng CEA Registration No. R021984G +65 6494 3665 nicholas.ng@ap.jll.com
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Note: 1. Island-wide industrial space includes all types of space by both private and public sector 2. Historical average is based on data from 1993 to 2012 Source: URA, Jones Lang LaSalle Research, 1Q13
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Economy The Ministry of Trade and Industry (MTI) announced in February 2013 that the Singapore economy grew by 1.3% on a y-o-y basis in 2012, a slowdown from the 5.2% in 2011, mainly due to weakness in externally oriented sectors. Global economic conditions have stabilised in recent months as financial market conditions improved, but economic growth is likely to remain subdued. Growth in Asia is likely to be moderate, supported by resilient domestic demand and growth in external demand. As such, the outlook for Singapore remains cautiously positive and the MTI is forecasting growth of between 1.0% and 3.0% in 2013. The Singapore Purchasing Managers’ Index (PMI) in April indicated that the manufacturing economy expanded for the second consecutive month, posting an overall reading of 50.3. In the electronics sector, the index posted a reading of 51.2, indicating further expansion in new orders from the domestic and overseas markets. Supply According to the Urban Redevelopment Authority (URA), industrial stock grew 0.3% q-o-q to 425.8 million sq ft in 1Q2013, a marked contraction from the 1.1% increase in 4Q2012. The 1.4 million sq ft of net additional supply over the quarter was largely attributed to the increase of 0.9 million sq ft from the single-user sector. The multiple-user and warehouse sectors contributed a smaller net addition to total stock of approximately 0.3 million sq ft each. Significant single-user completions include 61 Seletar Aerospace View by Ascendas (Tuas) Pte Ltd and 6 Ang Mo Kio Industrial Park 3 by ST Electronics (Satcom & Sensor Systems) Pte Ltd. Multiple-user factory completions include CT Hub at 2 Kallang Avenue comprising 290,000 sq ft. Island-wide Industrial Net Addition, Take-up & Vacancy Million sq ft Vacancy Rate 30 16%! 7.0% 14%! 25 12%! 20 10%! 20 year Historical Average Net Take-up, 15 8%! 10.56 6%! 10 4%! 5 2%! 0 0%! Net Addition (LHS) Net Take-up (LHS) 20 year Historical Average Net Take-up Vacancy Rate (RHS)
Demand Data from the URA indicated that overall demand for factory space rose to 2.5 million sq ft in 4Q2012, and remained positive in 1Q2013 reaching 1.1 million sq ft. The bulk of demand in 4Q2012 came from the 1.9 million sq ft of single-user factory space that was absorbed, accounting for 76.0% of total takeup. This large take-up of single-user factory space also outpaced the 1.4 million sq ft of new supply completed in the quarter, pushing the occupancy rate for the sector higher by 30 bps to 95.1%. In 1Q2013, as new supply outpaced the demand, vacancy increased marginally, although rates remained low at 5.2% in the single user sector. While demand eased in 1Q2013, this was expected following the introduction of new cooling measures on the industrial sector in January 2013, although it still exceeded the level reached in 3Q2012 (1.0 million sq ft) before the measures were introduced. Rent Based on Jones Lang LaSalle data, conventional rents continued to stabilise in 1Q2013 and stood at $2.06 and $1.66 per sq ft for first and upper storeys, respectively. On a q-o-q basis, rents slipped marginally by 1.0% and 1.2% for first and upper storeys, respectively, as rental rates came under slight pressure on supply overhang from 4Q2012. Conventional Industrial Rental Values $per sq ft/mth Change Conventional (gross effective) Q-o-q 0.0% 2.50 Y-o-y 7.4% 2.00 From Last Peak 10.6% (3Q08) 1.88 2.00 1.70 From Last Trough 79.0% (1Q10) 1.50 Average, 1.23 10 year 1.05 0.95 1.00 0.50 0.00 12 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Note: Historical average is based on data from 2002 to 2011 Source: Jones Lang LaSalle Research,, 1Q13
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Transactions, Capital Values and Yields The industrial segment recorded total sales of $923 million in 1Q2013, according to data from the URA, an increase of 104% over the previous quarter, primarily due to the better performance in private industrial sales, which more than doubled from $345 million in 4Q2012 to $750 million in 1Q13. Noteworthy private sales included a plot along Pasir Panjang Road that was sold for $151 million, as well as The Galen at South Buona Vista Road, for $126 million by the Ascendas Group to its REIT unit – A-Reit. Conventional Industrial Capital Values $per sq ft Change Conventional 450.00 416 8.0% Q-o-q 2.9% Y-o-y 15.7% 6.9% 400.00 7.0% From Last Peak 44.1% (3Q08) From Last 121.8% (1Q10) 350.00 Trough 6.0% 297 295 300.00 5.0% 10 year Average (LHS), 4.4% 250.00 193 4.3% 205 4.0% 200.00 151 3.0% 150.00 2.0% 100.00 1.0% 50.00 0.00 0.0% 12 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Conventional (LHS) 10 year Average (LHS) Indicative Yield (RHS) Recent Industrial Transactions above $30 million Area Sale Price Price Date Building Name Address (sq ft) (milion) ($ per sq ft) Tropical Industrial Building Tropical Industrial Building 50,300^ $31.80 $632.21^^ 4Q2012 4Q2012 15 Jurong Port Road 325,446* $43.00 $132.13** 4Q2012 2 Pioneer Sector 1 12,142* $60.00 $4941.66** 1Q2013 Precise Two 15 Gul Way 203,276* $55.15 $271.31** 1Q2013 N.A. 100F Pasir Panjang Road 31,215* $39.02 $1250.15** 100G Pasir Panjang Road 120,761* $150.95 $1250.00** 1Q2013 The Galen South Buona Vista Road 234,384^ $126.00 $537.58^^ 1Q2013 2Q2013 Metro Warehouse 100H Pasir Panjang Road 31,978* $39.80 $1244.61** ^^ Based on floor area ^ Floor Area * Land Area ** Based on land area Source: Jones Lang LaSalle Research, URA, 1Q 2013 According to the URA’s latest data, the price index of multiple-user factory space gained 2.9% q-o-q in 1Q2013. The strength in price was in spite of a drop in the number of transactions in face of cooling measures in the form of Seller’s Stamp Duty (SSD) imposed on industrial properties suggesting that there is a strong underlying end-user demand for land sites. Based on Jones Lang LaSalle data, capital values of conventional space experienced growth of 2.8% qo-q to settle at $428 per sq ft, compared to the 0.9% quarterly growth seen in 4Q2012. Yields for conventional space compressed 20bps q-o-q to 4.2% due to weaker rental values coupled with higher capital value growth. 21
>2017
2017F
2016F
2015F
2014F
2013F
Millions sq ft
Outlook Supply According to the URA, new industrial space in the supply pipeline totalled about 49 million sq ft. Singleuser factories and warehouses are expected to form the bulk of potential supply (34.2% and 31.0%, respectively), followed by warehouses (31.0%) and multiple-user factories (23.5%). Business park space accounts for 11.3% of the new industrial space. Some major multiple-user developments scheduled for completion this year include North Spring Bizhub (1.0 million sq ft) at Yishun by SB Northspring Investment, Aperia at Lavender Street (0.6 million sq ft) by PLC 8 Development and I.Biz Centre (0.1 million sq ft) at Toh Tuck Road by Incorporated Builders. Island-wide Future Industrial Supply 30.0 25.0 6.0 20.0 4.7 15.0 20.9 10.0 13.3 1.3 5.0 4.9 4.1 2.4 1.5 0.0 Factory Warehouse Total: 59.2 million sq ft Note: 1. Island-‐wide industrial space includes all types of space by both private and public sector 2. Factory includes mulHple-‐user factory, single-‐user factory and business park 3. Supply indicates esHmated NLA based on an efficiency raHo of 85% Source: URA, Jones Lang LaSalle Research, 4Q12
Demand The Bank of Japan was the latest major central bank to announce significant asset purchases to support an expansionary monetary policy. Although the equities market rallied, major commodities, which are the raw material inputs to manufactured products, suffered from lower prices in 1Q2013. Any signs of weakness in global demand will adversely impact Singapore’s manufacturing sector and export-oriented Small Medium Enterprises. Residual domestic demand should help to offset this to an extent but vacancy rates of industrial space could increase in 2013, especially given the large amount of new supply in the pipeline. Demand for high-tech space however is likely to remain resilient as they cater to more niche industries such as biomedical and digital media companies. 22
Rental Values Rents for conventional space are expected to stabilise further, with potential downward pressure caused by weak business demand and oversupply concerns. With a larger supply of new space expected to enter the market over the coming years, landlords are likely to be more willing to lower asking rents in a bid to satisfy the selective nature of cost-conscious businesses. Consequently, rents are likely to be stickier, with any increases for the remainder of 2013 likely to be minimal. Demand Despite the new cooling measures announced in early 1Q2013 on industrial properties in the form of SSD, capital values still enjoyed strong growth of 2.9% q-o-q, Supporting capital values is the flood of global liquidity in the financial markets, which is expected to filter down to enhance demand for income generating assets. In addition, the continued low interest rate environment supports lower required yields, which in turn allow for higher capital values on assets. Â After taking into account the full-year market impact of these measures, we forecast average capital values for conventional space to end 2013 1.5% lower and a more moderated decline of 0.2% in 2014. Capital values for high-tech space are expected to be more resilient and post marginal growth of 0.1% in 2013.
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We register our interest in considering the proposed acquisition of 508 Chai Chee Lane on terms & conditions to be agreed between us:
Name Company
Address Telephone Facsimile E-Mail
Option 1:
Price (SGD)
Option 2:
Special Conditions (if any)
Funding
Date Yours sincerely, Authorised Signatory ------------------------ Name: Title: The Vendor retains the right to accept or decline any Expression of Interest (EOI). The completion of this form does not in any way constitute a binding offer made by the Interested Party to the Vendor.
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Jones Lang LaSalle Property Consultants Pte Ltd | Singapore | CEA Licence No. L3007326E www.joneslanglasalle.com.sg Jones Lang LaSalle Property Consultants Pte Ltd for themselves and for the vendors or lessors of this property whose agents they are, give notice that the particulars do not constitute, nor constitute any part of an offer or a contract. All statements contained in these particulars as to this property are made without responsibility on the part of Jones Lang LaSalle Property Consultants Pte Ltd, or, its vendors or lessors. All descriptions, dimensions and other particulars are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Jones Lang LaSalle Property Consultants Pte Ltd has any authority to make or give any representation or warranty whatever in relation to this property. COPYRIGHT © JONES LANG LASALLE 2013.