Wartsila Singapore to sell 5 properties in global strategy

43 and 45 Gul Drive (above) and 47 Gul Drive.
43 and 45 Gul Drive (above) and 47 Gul Drive.PHOTO: COURTESY OF CUSHMAN & WAKEFIELD
43 and 45 Gul Drive and 47 Gul Drive (above).
43 and 45 Gul Drive and 47 Gul Drive (above).PHOTO: COURTESY OF CUSHMAN & WAKEFIELD
14 Benoi Crescent.
14 Benoi Crescent.PHOTO: COURTESY OF CUSHMAN & WAKEFIELD
11 Pandan Crescent.
11 Pandan Crescent.PHOTO: COURTESY OF CUSHMAN & WAKEFIELD

Marine, energy sector service provider will sell three outright, two with leaseback plans

Wartsila Singapore, which provides services for the marine and energy power plant sectors, is looking to sell five industrial properties.

A site at 11 Pandan Crescent and one at 14 Benoi Crescent will be sold with leaseback arrangements.

The other three - at 43, 45 and 47 Gul Drive - will be outright sales with vacant possession on completion, said marketing agent Cushman & Wakefield yesterday.

Mr Shaun Poh, Cushman & Wakefield's executive director of capital markets, said the Finland-listed Wartsila is reducing its asset load to focus on core operations, and has also sold assets in Finland.

Wartsila Singapore, which was set up here in 1982 and has more than 1,000 employees, plans to lease back the properties at 11 Pandan Crescent and 14 Benoi Crescent and continue to house its staff here.

Mr Poh said: "It is going to spend on renovations, add expansions and upgrade the facilities in those two sites."

It is understood there are plans to spend about $20 million on 11 Pandan Crescent - which has three factory-cum-workshops, a canteen and a five-storey ancillary office block, and land area of about 35,500 sq m, including 3,110 sq m of waterfront land facing the Pandan River.

Wartsila will also spend about $6 million on 14 Benoi Crescent, which has a front-facing three-storey ancillary office block, and a single-storey factory-cum-workshop at the back, with a land area of about 9,860 sq m. The indicative asking prices are $40 million for 11 Pandan Crescent and $11 million for 14 Benoi Crescent.

Mr Poh noted that on a per square foot (psf) basis, the indicative prices are well in line with recent transactions for similar properties with comparable balance land lease tenure in those areas.

"It's part of a global strategy. For those two sales, the firm is looking for investors, and typically real estate investment trusts (Reits) will be interested... the plan is to get some yield," he said.

"We are not dictating any proposed deal structure; will talk to potential buyers for their proposals."

He added that the two sites could also attract developers and fund managers "who are looking for high-yielding assets with (a) strong tenant brand name and stable income to add to their industrial portfolio".

Mr Poh said the three separate JTC semi-detached factories at 43, 45 and 47 Gul Drive are assets Wartsila can do without.

"One is already tenanted while the other two are taking up small spaces that are not occupied at full capacity."

The asking prices are $8 million for 43 Gul Drive, $6.4 million for No. 45 and $5.7 million for No. 47. They range from $230 psf to $288 psf on existing floor areas. The divestment will be conducted via an expression-of-interest exercise which will close at 3pm, on Friday, Oct 14.

A version of this article appeared in the print edition of The Straits Times on September 20, 2016, with the headline 'Wartsila Singapore to sell 5 properties in global strategy'. Print Edition | Subscribe