Singapore-listed real estate investment trust AIMS AMP Capital Industrial REIT (AA REIT) announced on Thursday that it is investing up to S$48.2 million ($36 million) to transform its existing property at 3 Tuas Avenue 2 into a modern industrial facility.
In a disclosure to the Singapore Exchange, AA REIT said it aims to transform the site from a purpose-built production and warehouse facility into a modern and versatile ramp-up industrial facility suitable for both production and storage.
Upon completion, the property’s value is estimated at S$51million ($38 million).
The property, 3 Tuas Avenue 2, is located right at the heart of the Jurong Industrial Estate, in close proximity to two major expressways, namely the Pan Island Expressway and the Ayer Rajah Expressway.
The property is well-connected in the area and to the city with a 4 kilometre-long, dual three-lane road viaduct to Tuas South Avenue 3, and is within walking distance to Tuas Crescent MRT station.
AA REIT said the redevelopment is part of its ongoing asset enhancement strategy.
“Amidst a softer industrial market, we continue to execute on our asset enhancement initiative strategy to build a high quality and resilient portfolio that can meet evolving market needs and attract quality tenants,” said Koh Wee Lih, CEO of AIMS AMP Capital Industrial REIT Management Limited, the manager of AA REIT.
AA REIT said the redevelopment is due for completion in the second half of 2019 and will increase the ease of sub-dividing the property for multi-tenancy usage, enhancing flexibility for customisation and leasing.
Gross floor area is expected to increase by 52 per cent to approximately 24,890 square meters and the plot ratio will increase from the current 0.92 to the maximum of 1.40, the real estate investment trust added.
The redevelopment is in line with the Singapore government’s master plan to develop and upgrade the Tuas region into a high-performing industrial space anchored by the development of the new Tuas Mega Port, AA REIT said.
Principally sponsored by AIMS Financial Group and AMP Capital, part of Australia’s retail and corporate pension provider AMP Group, AA REIT’s existing portfolio consists of 26 industrial properties, 25 of which are located throughout Singapore, with a total value of S$1.23 billion ($918 million) based on valuations obtained as at 31 March 2018.