Metro bets on decentralised office market with $45.6 mil investment in Tampines property
SINGAPORE (April 18): Metro Group has acquired 7 & 9 Tampines Grande, a premium Grade A office property in Singapore, through a 50:50 joint venture (JV) between its subsidiary Metrobilt Construction and an affiliate of SRIF GP.
On its part, Metro will be investing about $45.6 million for its 50% capital commitment share.
Through the newly-incorporated JV company, Ascend TGrande, both Metro and SRIF have agreed to purchase T-Grande Investment Holding from Golden Crest Holdings, a wholly-owned subsidiary of City Developments.
T-Grande Investment Holding is the owner of T-Grande Property Holding, which in turn owns and operates the two office property blocks.
Situated in Tampines Regional Centre, 7 & 9 Tampines Grande comprise two blocks of eight-storey office towers linked by a double-volume entrance lobby, with retail and F&B outlets on the ground floor.
The development has a site area and gross floor area (GFA) of 86,110 sq ft and 361,660 sq ft, respectively. With a net lettable area spans 288,000 sq ft, it has a 91% committed occupancy rate with key tenants including Hitachi Asia, AIA Singapore and Sysmex Asia Pacific.
As such, Metro is expecting the acquisition to immediately contribute to the group’s current income stream, with potential positive rental reversions from upcoming lease renewals as Singapore’s office rents continue to rise.
In its filing on Thursday, Metro says it believes Singapore’s commercial market – especially decentralised office spaces – is currently at an inflection point, from which it is poised to deliver strong growth in the decade to come.
The group’s latest investment therefore represents an “excellent preposition for Metro to mark its entry and gain exposure to Singapore’s limited Grade A decentralised office market” given the office property’s strategic location at Tampines Regional Centre, which still provides connectivity to both private and public transportation networks.
This will allow it to leverage on the growth potential for Singapore’s office market, particularly in the eastern side of Singapore, adds the group.
Lastly, Metro says its latest investment is in line with its intention to build a presence and investment in the region through selective positioning, new investments in quality properties, and strategic alliances – with a view to broadening revenue streams and facilitating sustained profitability for the group.
Shares in Metro closed flat at $1.04 on Thursday.
