International computer company Hewlett-Packard has commissioned a new multi-million dollar high-tech complex in Singapore. The project will be undertaken by Mapletree Industrial Trust and is thought to be the republic’s biggest single commercial development.
Planning approval has yet to be granted, but it is expected the S$250m (£119m) build-to-suit facility will be situated on a MIT-owned plot within the Telok Blangah Industrial Estate. The 437,000sq ft site, located close to the city’s business district, currently houses two seven-storey factories and an amenity centre.
These will be demolished and replaced with 824,500sq ft of offices, manufacturing facilities and product and software development suites. Headquartered at Palo Alto, California, Hewlett-Packard is a global provider of hardware and software and provides technology services and solutions to businesses in more than 170 countries. It has agreed an initial ten-and-a-half-year lease on the Sigapore site.
“This project will be MIT’s largest build-to-suit development to date, underscoring our focus on the development of more customised facilities which meet our tenants’ operational and expansion needs,” explained the trusts’s chief executive officer, Tham Kuo Wei.
“The redevelopment will unlock value for MIT’s portfolio by repositioning the property as a high-tech industrial cluster and maximising available plot ratio.”
MIT’s S$2.9bn (£1.3bn) property portfolio is made up of 83 industrial properties located across Singapore. These include factories, business parks, high-tech buildings and light industrial buildings.
The Hewlett-Packard project will be constructed over two phases, with both fully occupied by the first half of 2017. The existing factories on the site are tenanted by a variety of manufacturing companies and Mapletree has promised, as a condition of its building consent, to offer them alternative MIT-owned premises.
Tham said his trust has put a comprehensive tenant assistance package in place to address any concerns. “We are offering all tenants an extended notice period of 12 months at preferential gross rental rates. In addition, for tenants who choose to relocate to alternative premises within MIT’s portfolio, we will offer discounted gross rental rates, longer rent-free periods and cash subsidies,” he added.
More than 388,000sq ft of space has been earmarked for the affected tenants considering relocation, almost one-and-three-quarters of what the Telok Blangah businesses currently occupy. “These alternative premises are being offered at discounted gross rental rates for a new three-year lease,” said Tham. “And that is about 18 to 38 per cent lower than the average rental rates for new leases at the respective clusters.”
MIT has also informed the tenants they will not be required to reinstate their premises and will not need to compensate for early termination if they move out prior to the expiration of their leases. Those who do not take-up a new lease at an alternative trust site will also benefit from a cash subsidy equivalent to six months’ rent on their new premises.
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