ESR-REIT will be redeveloping a build-to-suit high-specifications facility at 21B Senoko Loop for NTS Components Singapore, says its manager on April 12.
The redevelopment will cost an estimated $38.5 million. It is expected to be completed by the 1QFY2024.
NTS is an existing tenant, and the redevelopment is done to meet its existing business needs, says Adrian Chui, CEO of the manager.
NTS is a wholly-owned subsidiary of NTS Group Asia Pte Ltd with more than 70 years of manufacturing experience. In Singapore, NTS specialises in complex mechatronics assemblies and manufacturing of high-accuracy frames and sheet metal for the high-tech industry.
21B Senoko Loop is a general industry property located within the Woodlands Industrial Estate, an area with a limited supply of high-specifications properties.
The property currently comprises a seven-storey factory cum dormitory block and a four-storey warehouse block with a combined gross floor area of 195,823 sq ft. It sits on a land area of 80,241 sq ft and has a remaining land tenure of about 31.1 years as at Dec 31, 2021.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
The redevelopment will be executed in two phases. Phase one is expected to be completed in the first half of 2023. Phase will follow some 10 months after.
According to the REIT manager, the phased redevelopment allows NTS to better plan and start its business expansion and operations with minimal delay.
In addition to NTS, the property will also house its sister company, NTS Mechatronics Singapore Pte. Ltd. NTS Mechatronics specialises in complex mechatronics assembly for the high-tech industry. The redevelopment is expected to achieve the Green Mark Gold certification upon completion.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
Under the terms of the redevelopment, the property will be leased to NTS on a triple net basis for 15 years with annual rental escalations. NTS will be fully responsible for the payment of utilities, maintenance expenses, property tax and land rent.
Upon its completion, ESR-REIT will have nine high-specifications assets in its portfolio, representing some 18.4% of its portfolio valuation.
“The redevelopment not only strengthens our relationship with NTS but is a testament of our commitment to provide business space solutions to grow with our tenants as they expand their footprint,” says Chui.
“It also demonstrates our dedication in achieving organic growth by converting old and dated general industrial properties into high-specifications assets that are relevant to today’s industrialists. The redevelopment will increase the proportion of resilient new economy assets in our portfolio, enabling us to continue delivering long-term sustainable value to our unitholders,” he adds.
Units in ESR-REIT closed 1 cent lower or 2.35% down at 41.5 cents on April 11.
