SINGAPORE (Dec 5): Hupsteel is redeveloping a Genting Lane freehold property it owns into an eight-storey industrial building, with elevated car parks with a gross floor area (GFA) of 5,259 sq m, for an estimated cost of $9.3 million which represents 5.9% of the group’s net assets as at end-Sept.

The group has received a Letter of Award to go ahead with the redevelopment, and intends to use its cash holding of $63.9 million as at end-Sept to finance construction works for the project.

Located at 38 Genting Lane, the property occupies a land area of 2,103 sq m and is classified as a Business 1 (B1) zone which is intended for industry, warehouse, utilities and telecommunication uses.

The existing building was built in 1985, and was multi-tenanted until recently.

In a Tuesday announcement, Hupsteel explains how renting out the property in its present condition generates only a “meagre return”, and that the newly-redeveloped industrial building, once completed, will be capable of being strata sub-divided for use by multiple users.

It is also through this project that the group intends to enhance the capital value of the property while improving rental yield, it may decide to rent or sell the individual strata units upon completion of the redevelopment.   

Construction will take about 24 months to complete from the date of the building authorities’ approval, and hence is not expected to have any impact on the net tangible asset (NTA) per share in Hupsteel for FY18.

Shares in Hupsteel closed 1 cent higher at 90 cents on Tuesday.