Hines acquires second industrial property in Singapore through JV

Industrial continues to be Hines’ key focus in Singapore with high rent and capital value growth. Ground up development might be next as the developer eyes more opportunities alongside its Japanese partners.

US-headquartered real estate investment manager and developer, Hines, has announced its acquisition of a logistics asset in Singapore, through a joint venture (JV) with Mitsubishi Estate and MBK Real Estate Asia (MREA).

The property is located at 15 Senoko Loop in northern Singapore near the Johor-Singapore Causeway on the border with Malaysia. 

A July 2 press release stated that the property (pictured) sits on a 24,464-square-metre site with a four-storey facility that has around 41,482 square metres of total gross floor area.

Kim Fong Lim, country head of Singapore at Hines, told FinanceAsia: “Singapore’s industrial sector does present favourable dynamics. The sector has seen rent and capital value growth due to supply constraints, making it an attractive investment opportunity.”

“Importantly, this deal represents Hines’ first joint venture with Japanese institutional partners in Singapore whom we look to scale our business within the market,” he added.

Other promising sectors the Hines team is exploring in Singapore include office, retail and living although industrial continues to be the key focus.

Lim said the team is also looking at ground up development opportunities.

CBRE disclosure shows that the property was on sale at an indicative price of S$100 million ($73.6 million) last October. Final size of the deal remains confidential.

LSEG data recorded 31 industrials mergers and acquisitions (M&A) transactions that targetted the Singapore market in the first half of 2024, with a total value of $175.3 million. Real estate was recorded separately in the dataset, standing at $126.85 million with 11 deals in the first half.

Both sectors witnessed a year-on-year decrease of almost 90% compared with the first half of 2023.

This marks Hines’ second industrial deal in the Singapore market,after its acquisition of Bukit Batok Connection in 2022. The press release underlined that limited quality spaces and a supply crunch have driven up rent prices and capital value growth for Singapore’s industrial and logistics sector in Q1 2024, making it one of the “most popular” among Asia Pacific (Apac) investors.

“With the growing strength of our industrial portfolio in Singapore, together with the sector’s demand and supply dynamics, we’re optimistic and eager to capture more opportunities in the market,” Lim commented in the press release.

Koji Segawa, managing director of Mitsubishi Estate Asia said the team believes Singapore’s logistics and industrial sector will continue to be “robust”; while Koji Nishikiori, director and chief executive officer (CEO) at MREA pointed to both the acquired property’s “prime location” and the sector’s “strong performance”.

The transaction was completed late June on a sale and leaseback basis, where the building is leased back to the seller, British American Tobacco, as the anchor tenant. Hines, Mitsubishi Estate and MREA become the joint lessors.

Sumitomo Mitsui Banking Corporation (SMBC) Singapore Branch acted as the financing partner for Hines.

Hines opened its Singapore office in 2020, managing assets for its regional clients through funds and programmatic ventures.

MREA is a wholly owned subsidiary of Mitsui and Co., founded in 2017 targeting real estate business in Southeast Asia. Mitsubishi Estate is one of the largest real estate developers in Japan, whose track record in Singapore includes co-development of office building CapitaSpring with CapitaLand.

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