Mapletree Industrial Trust will redevelop the Kolam Ayer 2 Cluster in Singapore into a high-tech industrial precinct, with a total project costs of around S$263 million, the trust said in a filing to SGX before the market open Wednesday.
The project will include a build-to-suit facility for a Germany-based global medical device company, which will take up around 24.4 percent of the enlarged gross floor area when the redevelopment is completed, Mapletree Industrial Trust said.
“This is an opportune time for us to embark on the proposed redevelopment after successfully securing significant pre-commitment from the anchor tenant,” Tham Kuo Wei, CEO of the trust’s manager, Mapletree Industrial Trust Management, said in the statement.
“The long-term lease commitment from the anchor tenant will provide stable income and increase the portfolio’s weighted average lease to expiry. As MIT’s largest redevelopment project to date, this is another strategic step in growing the Hi-Tech Buildings segment.”
A new seven-storey purpose-built development on the site will serve as the anchor tenant’s new Asia-Pacific hub, the filing said. The lease period is 15 years, with annual rental escalations and the option to renew for two more five-year terms, the trust said.
The Kolam Ayer 2 Cluster currently has two seven-storey flatted factories and an amenity center, the filing said. Current tenants will be given an extended notice period of 12 months, assistance relocating within Mapletree Industrial Trust’s portfolio at discounted rates and other subsidies.
The construction is expected to begin in the second half of 2020 and end in the second half of 2022, the trust said.
The total project costs includes the site’s book value of S$70.2 million as of end-March, the filing said.
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