Soilbuild REIT's 2 Pioneer Sector 1. (Photo: Soilbuild REIT)

Soilbuild REIT is proposing to redevelop its property at 2 Pioneer Sector 1 into a 4- storey ramp-up warehouse facility with open yard space.

The existing plot ratio of the property is 0.55.

According to the Urban Redevelopment Authority (URA) Master Plan, the current permitted development plot ratio is 1.00.

The manager has the intention of increasing the plot ratio to 1.32 and has had several discussions with the authorities.

The redevelopment will increase the gross floor area of the facility and enhance the asset’s value, said the REIT.

The manager has commenced marketing the property and is currently in negotiation with a few potential multi-national anchor users, it added.

The current value of the property is SGD48.3 million, based on Colliers’ valuation dated 31 December 2019.

With the proposed redevelopment, the appraised gross development value is SGD142.0 million based on plot ratio 1.32.

The total development costs is estimated to be SGD81.8 million.

Soilbuild REIT plans to draw down its existing loan facility and obtain new loan facilities to fully fund the proposed redevelopment progressively.

Assuming that Soilbuild REIT had on 31 December 2019 completed, held and operated the proposed redevelopment and drawn down debt the aggregate leverage of Soilbuild REIT is expected to increase from 38.2% to 42.0% based on plot ratio 1.32.

Following a process to obtain quotes from several contractors, the consultant quantity surveyor for the exercise has recommended appointing affiliated company Soil-Build (Pte.) Ltd as the design and build contractor for the proposed redevelopment.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.