Tuesday, April 6, 2010

United Engineers buys $25m property

UNITED Engineers (UE) has bought two industrial buildings at Ang Mo Kio for about $25 million, as part of plans to grow its portfolio in build-to-suit properties.

Motorola owned the two buildings – Motorola Innovation Centre and Motorola Excellence Centre. They will collectively be known as UE BizHub Central after the ownership change.

The two complexes have a total gross floor area (GFA) of 378,426 sq ft. UE will centralise most of its business operations there by the end of the year. This means its headquarters at UE Square will move.

The company also aims to build a new wing at UE BizHub Central. This will raise GFA up to 500,000 sq ft, subject to planning approval.

UE is expanding its build-to-suit footprint, said the divisional managing director of its property division, David Liew. ‘We are looking out for other potential sites in Singapore which we could develop into build-to-suit, integrated space solutions under the brand name UE BizHub.’

UE owns another property under that brand, called UE BizHub East. This property is scheduled for completion in 2013 and will comprise 611,500 sq ft of office space, 26,400 sq ft of convention space and 250 hotel rooms or service apartments.

UE does not expect the acquisition of UE BizHub Central to have a material impact on its net earnings or net tangible assets per share this financial year. The counter gained 14 cents yesterday to close at $2.51.

Separately, private developer KNG Development has 80 factory and warehouse units in Kaki Bukit Industrial Estate for sale.

The units will be at the upcoming four-storey ramp-up industrial building, First East Centre. Selling prices start at $356,000. Given that each unit measures 1,800 sq ft or more, the price starts about $198 per sq ft.

Colliers International is marketing First East Centre. According to its director (industrial) Tan Boon Leong, monthly rents in the area are around $1.50 psf.

The units make an attractive investment because rental returns can reach 9 per cent, he said. Also, First East Centre is zoned Business 2 and will appeal to a wide tenant base, such as companies in vehicle repair and servicing.

Source: Business Times, 6 Apr 2010

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