MIT – BT

Three parties in final race for JTC assets

Ascendas unit, MIT and Soilbuild said to have been shortlisted

THREE parties – a unit of Ascendas group, Mapletree Industrial Trust (MIT) and Soilbuild Group – are said to have been shortlisted to take part in the second and final round of bidding for two tranches of JTC Corporation’s flatted factories and amenity centres which were earlier tipped to be worth a total $600-650 million.

Market watchers suggest the Ascendas entity could be the listed Ascendas Real Estate Investment Trust (A-Reit), which along with MIT and Soilbuild, is said to have been shortlisted to bid for one tranche of assets, while the Ascendas entity and MIT will bid for the second tranche of properties.

Final submissions for both tranches of properties are expected to close next week, BT understands.

DTZ, which is managing the sale, could not be reached for comment.

Five or more parties are believed to have submitted bids in the first phase of the two-stage tender process which closed in early March. The contenders were allowed to bid for either or both tranches of assets and had to state their indicative bid prices for the respective tranche of assets in addition to listing their track record, financial strength and proposed business plans for the properties, among other things.

The three parties were then said to have been shortlisted, and invited to perform due diligence on the assets in the tranche or tranches they were eyeing.

For the second stage of the tender process, analysts reckon that the bid price is likely to be the main factor JTC Corp will use in deciding whom to award the two tranches of properties to, since it would have factored in the qualitative factors in shortlisting the bidders under stage one.

Sources suggest that the bidders taking part in Round 2 cannot bid lower than a stipulated percentage of their indicative bids under Round 1.

‘So basically they have some leeway to adjust their prices downwards if necessary since their initial indicative bid prices were formulated without the benefit of doing due diligence on the assets,’ said an analyst.

JTC is selling 21 blocks of flatted factories and amenity centres adding up to over 300,000 sq metres and located mainly in places like Kolam Ayer, Kallang Basin, Tai Seng, Bedok and Kampong Ubi, according to earlier reports.

This marks the second phase of JTC’s asset divestment exercise. The first phase culminated in the $1.71 billion sale to Temasek unit Mapletree Investments of 39 blocks of flatted factories, 12 amenity centres, six stack-up buildings, one ramp-up building, three multi-tenanted business park buildings and one warehouse building.

Mapletree later roped in Arcapita Bank and the portfolio was floated last year under MIT.

JTC has previously said the second phase sale of its portfolio will allow it to focus on seeding new ideas and developing innovative projects that can create a differentiating advantage for Singapore.

Market watchers reckon JTC would be gunning to wrap up the sale before the year runs out.