Company in auto trade exercises option to buy Sime Darby Business Centre for S$68 million

Citi Commercial Pte Ltd

SIME Darby Business Centre at 315 Alexandra Road, next to the Ikea store, could change hands for S$68 million.

This works out to about S$380 per square foot (psf) on the existing gross floor area (GFA) of nearly 179,190 square feet (sq ft).

An option to purchase the property was exercised this month by Eagle Land (Credit), which is in the car dealership business for new and used vehicles. The company also facilitates floor stock financing to several vehicle dealerships here, according to information on the website of Eagle Land’s subsidiary AutoSprint, which runs a dedicated vehicle workshop.

Eagle Land (Credit) is headed by Thomas Yap Leong Guan, who has more than 30 years’ experience in the car dealership trade. He used to run parallel car importer Cyber Cars.

Market watchers said that although Eagle Land (Credit) has exercised the option to purchase the light industrial building, the transaction will require the approval of JTC Corporation. The building is on a 83,102 sq ft site with a balance lease term of about 31 years and seven months.

On site is a five-storey building originally developed in the 1960s and a three-storey annexe at the rear.

Sime Darby Business Centre is owned by a Singapore-incorporated company controlled by Blackstone. Performance Motors used to occupy showroom space and a workshop in the building.

Observers have suggested that given the prospective buyer’s car dealership and workshop businesses, it would be buying the property predominantly for owner occupation. Under JTC rules, Eagle Land would not be allowed to sublet more than 30 per cent of the building’s GFA.

CBRE is understood to be brokering the sale of 315 Alexandra Road; it could not be reached for comment.

The site is zoned for Business 1 use with a 2.5 plot ratio under the Urban Redevelopment Authority’s latest master plan; this would translate to a maximum GFA of 207,754 sq ft – 16 per cent more than the existing GFA.

There is existing showroom space on Level 1 of Sime Darby Business Centre fronting Alexandra Road. In addition, there is workshop space suitable for car servicing and repairs on Level 2, with vehicular access via a circular ramp-up driveway at the rear.

“The current building’s design and use are suitable for a car business, though the prospective buyer could explore the potential to add more space at the rear to maximise the allowable GFA for the site,” said Cushman & Wakefield executive director for logistics and industrial Brenda Ong.

Ong described the S$380 psf pricing as within expectations, given that the prospective buyer would use the asset primarily for owner occupation; it will have to occupy at least 70 per cent of the building’s GFA under JTC rules.

“If the buyer were not an owner occupier but instead, say, a property fund or Reit, it would be required under JTC rules to enter into a leaseback arrangement with the seller. Such a buyer, looking at the property as an investment to generate stable rental income, would have paid above S$400 psf on GFA for this asset...

“Rentals in the area can be quite good – around S$5 to S$5.50 psf a month for showrooms and S$2.50 to S$3 psf a month for car workshops. There is limited supply of such space in the locale, and this building has good visibility along the main road. The property is part of the established Leng Kee-Alexandra motor belt,” said Ong.

In July 2022, Aims Apac Reit announced that its plan to purchase Sime Darby Business Centre for about S$102 million had fallen through, about 18 months after it said it had entered into a put-and-call option agreement to purchase the property.

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