JTC scraps plans to list assets in Reit
Industrial landlord will instead sell 62 properties to a Temasek subsidiary for $1.71 billion
By Fiona Chan
JTC Corporation has scrapped its long-awaited plans to list its industrial assets in a property trust, citing volatile market conditions.
Instead, Singapore's biggest industrial landlord is selling the properties to Mapletree Investments, a subsidiary of Temasek Holdings, for $1.71 billion, JTC and Mapletree said in a joint statement yesterday.
Mapletree also said it might list the properties in a new trust, possibly combining them with some of its own assets.
The move caught market watchers by surprise, as Mapletree was hired in February to manage JTC's proposed billion-dollar real estate investment trust (Reit). The listing was set down for the middle of the year.
'It's definitely a surprise move. It's a complete U-turn from what JTC said earlier,' said Mr Tan Boon Leong, industrial director at property firm Colliers International.
'It may not sit too well with local and foreign investors, who were expecting a new Reit, to just go and sell off the properties like that. It may be seen as very 'Singapore Inc'.'
But Mr Dominic Peters, director of industrial services at Savills Singapore, said this was 'a better move than JTC having to list on its own because it is difficult to raise funds now'.
JTC said it would complete the sale of 62 properties, including 39 flatted factories and three business park buildings, to Mapletree by July 1. It added that this divestment option had been part of Mapletree's proposal to JTC when the former was appointed as manager of the future Reit, although it had not been disclosed then.
Mapletree has its own industrial property trust, Mapletree Logistics Trust, which is worth about $2.5 billion. Its biggest rival, Ascendas Reit, has a $4.2 billion industrial portfolio.
If Mapletree pumps all the JTC properties into its existing Reit, it could become 'the biggest industrial Reit around', said Mr Tan.
But Mapletree also has other unlisted assets in its industrial fund and could combine these with JTC's assets to form a whole new Reit.
Experts said one issue would be whether JTC's properties were a good fit with the Mapletree assets.
'I believe 95 per cent of JTC's assets are older flatted factories in housing estates with rentals of $1 to $2 per sq ft - a different portfolio from Mapletree,' said an industry watcher.
Colliers' Mr Tan said, however, that JTC's properties were all in 'great locations'. The tenants, though, should expect rentals to rise after Mapletree takes over, as it would have to improve asset yields before listing them.
FOR SALE: Among the industrial assets that JTC Corporation is selling to Mapletree Investments are The Synergy at the International Business Park (top) and a flatted factory property in Lower Delta Road (above). -- PHOTOS: ST FILE PHOTO, GAVIN ANDERSON
FOR SALE: Among the industrial assets that JTC Corporation is selling to Mapletree Investments are The Synergy at the International Business Park (top) and a flatted factory property in Lower Delta Road (above). -- PHOTOS: ST FILE PHOTO, GAVIN ANDERSON
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