AIMS AMP Capital Industrial REIT targets S$25m revamp of 103 Defu Lane 10

Its asset value will be tripled.

According to a release, AIMS AMP Capital Industrial REIT announced a S$25.4 million redevelopment of 103 Defu Lane 10, which will triple the value of the asset.

Upon completion, the asset is expected to be valued at S$42.6 million, up from its current value of S$12.0 million.

The Manager has secured an anchor tenant for the redeveloped site. Singapore company Focus Network Agencies (Singapore) Pte Ltd (FNA) has signed a lease over approximately 76 percent of the property.

FNA is a leading distributor and retailer of premier chocolates and confectionary products and is the owner of “The Cocoa Trees” chain of chocolate boutiques.

The tenant will occupy levels one, two, three, four and six for a period of six years and four and a half months.

AIMS AMP Capital Industrial REIT CEO, Mr Nick McGrath, said: “This is another excellent example of how we are unlocking value within our portfolio to deliver greater returns to unitholders. By increasing the built plot ratio from 1.2 to 2.5, we will significantly increase the value this asset contributes to our portfolio.”

“This is a relatively small investment but one that will provide high returns, with the redevelopment profit margin expected to be around 14.0 percent,” he said.

AA REIT Manager awarded Boustead Projects Pte Ltd the contract to design and build the 202,901 sqft industrial facility which is expected to be completed in May 2014.

Boustead Projects Pte Ltd Managing Director Thomas Chu said, “We are pleased to bring our design and build industrial experience to this project and look forward to working with the Manager of AA REIT.”

The redevelopment of 103 Defu Lane 10 will see the site transform from a two storey warehouse and adjoining three storey building into a high value six storey industrial facility. The gross floor area will more than double from 97,367 sqft to approximately 202,901 sqft.

FNA Group CEO Paul Loo Lip Giam said, “This is a major milestone for the FNA Group. AA REIT has developed a high quality industrial solution which will enable us to gain efficiencies in our logistics, showcase our operations and products in a more professional manner and give us the space to grow our business.”

103 Defu Lane 10 is situated within Defu Industrial Estate, near the commercial hub of Paya Lebar Central. The redevelopment is in line with HDB’s strategy to develop and upgrade Defu Industrial Estate into a modern industrial park.

The development phase will have minimal impact on AA REIT’s revenue, with the property contributing less than two percent of net rental revenue in FY2012.

The redevelopment will be funded with a committed debt facility.