[UPDATE] With 56% of units sold, CT FoodNex launch underscores demand for food factories

/ EdgeProp Singapore |
Ng: About 90% of the buyers were Singaporeans, and the remaining 10% were foreigners (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - CT FoodNex, a freehold, multi-user food factory at Mandai Estate, opened for sales bookings on May 8. The 10-storey, ramp-up factory by developer Chiu Teng Group has 109 strata-titled industrial units and one canteen. These B2 industrial units range from 1,700 to 2,928 sq ft, while prices start from $2.5 million.
On May 8, Chiu Teng collected 80 cheques as expressions of interest (EOI). CT FoodNex was launched for sale on May 9. Within a week, 61 (56%) of the 109 units were taken up at an average price of $1,545 psf, according to the developer. The sales reflect a 60% conversion rate.
While most were single-unit buyers, several were multiple-unit purchasers who bought two or three units, including one who bought an entire floor of 12 units. About 90% of the buyers were Singaporeans, and the remaining 10% were foreigners, says Jerome Ng, director of business development at Chiu Teng Group.
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According to Ng, the buyers were a mix of investors and business owners. “Most of these business owners intend to operate their units as a central kitchen,” he adds. “This increases their production efficiency while reducing their retail storefront space and manpower requirements simultaneously.” These business owners could also benefit from being part of an ecosystem where they could order supplies in bulk, hence enjoying economies of scale, notes Ng.
CT FoodNex scale model - EDGEPROP SINGAPORE
CT FoodNex, a new 109-unit, freehold food factory, was launched on May 9, and 61 units (56%) were sold by May 16 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Besides F&B businesses setting up a central kitchen, another source of demand for food factory units is cloud or ghost kitchens, which have gained popularity since Covid. “These cloud or ghost kitchens give F&B operators the flexibility of just focusing on food delivery or renting a kiosk instead of taking up a storefront and paying high retail rents,” says Ken Low, managing partner of SRI, which is jointly marketing CT FoodNex with PropNex and ERA Realty Network.
With F&B operators continuing to face a labour crunch, Low expects demand for cloud kitchen or central kitchen operations to strengthen.
A market research report released by Mark-Ntel Advisors in March 2023 forecasts that the cloud kitchen market in Southeast Asia will grow at 13.2% CAGR from 2023 to 2028.
According to SRI’s research, there were 263 industrial units, totalling 58,900 sq m (634,000 sq ft), in uncompleted strata-titled developments available for sale as of 4Q2022. Most of these units are in the North Region, and about 35% are at least 200 sq m (about 2,153 sq ft) in size, notes Low.
ARTIST'S IMPRESSION CT FOODNEX - EDGEPROP SINGAPORE
Cross-section of the 10-storey, ramp-up factory at CT FoodNex (Picture: CT FoodNex/Chiu Teng Group)

High specifications

CT FoodNex is a redevelopment of the former BHL Factories at 2A and 2B Mandai Estate that Chiu Teng purchased last July for $130 million. SRI brokered the deal. The 80,237 sq ft freehold plot fronts Woodlands Road, providing easy access for heavy vehicles entering or exiting the property.
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The building comes with high specifications. The first level has eight units with a ceiling height of 7.475m to 8.175m. Hence, units on the first level have a mezzanine level. The second to fourth levels house 10 units per floor, while the fifth to eighth levels have 12 units per floor. The ninth and 10th levels have 10 units each. The ceiling height for units on the upper floors ranges from 5.95m to 7.525m.
The first level is accessible to 40ft containers, while 20ft containers can reach the fourth level. The fifth to 10th levels are accessible only to 10ft to 14ft trucks. “We have different unit sizes and types to suit different users,” says Ng. CT FoodNex is targeted for completion sometime in 2H2025.
Unlike residential developments where the units on the highest floors are the most expensive, when it comes to factory units, the lower, the better. Hence, the most premium floor is the first level.
Nearby are two adjoining freehold industrial sites at 10 and 12 Mandai Estate. The two sites were launched for sale last October and acquired by niche developer Smartisan Development for $100 million in December. Bruce Lye, co-founder and managing partner of SRI, brokered the sale. Smartisan is expected to redevelop the site into a strata-titled, multi-user food factory for sale.
10 and 12 Mandai Estate - EDGEPROP SINGAPORE
Two adjacent industrial buildings at 10 and 12 Mandai Estate were purchased by Smartisan for $100 million last December, to be redeveloped into a freehold, multi-user food factory (Photo: SRI)

Mandai Estate — an ecosystem

Over the years, Mandai Estate has transformed into a food zone. SRI’s Low attributes this to its location near the upcoming Agri-Food Innovation Park.
According to JTC Corp, Agri-Food Innovation Park will feature multi-tenanted developments with synergistic businesses. Agri-Food Innovation Park is part of the new Sungei Kadut Eco-District with four precincts: agri-food technology; waste management and recycling; metal; and timber and furniture industries.
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“Mandai food zone is near the Sungei Kadut Eco-District, Woodlands Regional Centre and the Senoko Food Connection in Sembawang,” according to SRI’s Low. “Eventually, they will all form an entire ecosystem and yield savings in terms of logistics.”
The proximity to the Woodlands Checkpoint, a 15-minute drive away, is another draw: It is convenient for Malaysian workers to commute, Low notes.
In the future, the Sungei Kadut Eco-District will have a new MRT station: the Sungei Kadut MRT Interchange Station for the Downtown and North-South Lines. “Having an MRT station will bring added convenience to workers and residents in the Sungei Kadut area,” says Low.
Sungei Kadut Eco District - EDGEPROP SINGAPORE
Mandai Estate is located near the Agri-Food Innovation Park, one of the four precincts of the Sungei Kadut Eco District (Source: JTC Corp website)
Low purchased a unit at CT FoodNex for investment. His colleague, Lye, purchased two units, also for investment. “It’s rare to find a freehold industrial property,” says Low. “And the location is ideal.”
SRI also brokered the sale of the entire floor of 12 units on the eighth floor of CT FoodNex. The buyer declined to be interviewed. However, the reasons cited for the bulk purchase are: the freehold tenure of the property, positioning of the property, confidence in the transformation of the Sungei Kadut Eco-District, and the limited supply of freehold industrial sites in the future. The buyer is considering using half the units for his business operations and the other half for investment.
Low estimates rental yields to be in the 3%–4% range. “For freehold industrial property, it’s about long-term capital appreciation,” he adds.
Nearby at 21 Mandai Estate is Food Vision @ Mandai. The 10-storey, multi-user food factory is a joint-venture project between EL Development and Sim Lian Group. Food Vision @ Mandai was soft-launched last December, and about 30% of the 114 freehold industrial units have been taken up. Based on caveats lodged to date, the average price of units sold is $1,436 psf.
UPCOMING INDUSTRIAL SUPPLY - EDGEPROP SINGAPORE
Source: Colliers

Supply catching up with demand

Besides Mandai Estate, there is demand for food factories in the industrial estates of Kim Chuan and Pandan, notes SRI’s Lye.
“We’re doing due diligence on a couple more sites,” he says. “Interest in such sites has been overwhelming.”
Near Tai Seng Industrial Estate, ERA is marketing a factory building at 7 Kim Chuan Lane. The property sits on a 15,761 sq ft, freehold site with a guide price of $43 million. The site is zoned business 2 (industrial) with a plot ratio of 2.5. Provisional permission has been granted for the site to be redeveloped into a six-storey, multiple-user food factory with a potential gross floor area of about 39,000 sq ft.
“The strata-titled units will appeal to food companies that prefer food factories located in the city fringe, as they can deliver products to the city centre within a short timeframe,” says Steven Tan, managing director of ERA capital markets and investment sales.
The latest round of property cooling measures on April 27 has led investors to consider alternative investment offerings, says SRI’s Lye. “However, investors’ considerations are typically rental demand and future growth,” he adds.
COLLIERS INDUSTRIAL RENT - EDGEPROP SINGAPORE
Across the board, industrial property prices and rents rose for the 10th consecutive quarter in 1Q2023, according to the JTC All Industrial indices. The rental index was up 2.8% q-o-q, marking the strongest quarterly growth since 3Q2013. Similarly, industrial prices rose 1.5% q-o-q, slowing slightly from the 1.7% q-o-q growth in the previous quarter.
Trade indicators remain soft, however, with continuous contractions recorded in manufacturing output, non-oil domestic exports and purchasing managers’ index, notes Colliers in its May 8 report.
In the meantime, the supply of new industrial space will be more than 10 million sq ft annually over the next three years, according to Colliers. Another 10.3 million sq ft is expected to come online this year, and the annual pipeline for the next two years is 10.9 million sq ft, markedly higher than the annual supply of 8.4 million sq ft over the past three years.
“With supply playing catch-up, tenants may get more options and relief as prices and rents soften,” comments Michael Bowens, head of industrial, Asia, at Colliers.
SALES TRANSACTION OF MANDAI ESTATE - EDGEPROP SINGAPORE
Source: EdgeProp Singapore, URA

Catering to SMEs

However, Chiu Teng’s Ng believes demand for industrial space from small- and medium-sized enterprises (SMEs), especially those in the food industry, will be resilient. “We’re more focused on creating flexible spaces for SMEs,” he says. “After all, 99% of the companies in Singapore are SMEs.”
According to the Department of Statistics, Singapore’s total number of enterprises increased from 273,100 in 2019 to 291,600 in 2021, of which 99% are SMEs.
Before CT FoodNex, Chiu Teng Group developed CT FoodChain, a 10-storey, strata-titled multi-user factory building at Pandan Loop, in the west. The property has a 99-year lease from 1984. Hence, there are 60 years left on the lease. Launched in 2021, all 98 units in the development are sold.
The group developed CT Hub, an 11-storey, multi-user industrial space with retail at Kallang Avenue. The property was completed in 2012 (Source: Samuel Isaac Chua/EdgeProp Singapore)
Established in 1999, Chiu Teng specialises in commercial and industrial spaces. The group developed CT Hub, an 11-storey, multi-user industrial space with retail, at Kallang Avenue. The property was completed in 2012. CT Hub 2, a strata-titled 10-storey, industrial-commercial property adjacent to CT Hub, was completed in 2015.
Meanwhile, at Tagore Lane, off Upper Thomson Road, Chiu Teng developed 9@Tagore, a four-storey, ramp-up, light industrial building completed in 2012. Next door, also by Chiu Teng Group, is Tagore 8, a freehold, light industrial building with 128 units completed in 2015.
Ask Buddy
Price trend for industrial property sales
Compare price trend of Commercial vs Industrial properties
Past Industrial rental transactions
Listings for industrial property
Past Industrial sale transactions
Price trend for industrial property sales
Compare price trend of Commercial vs Industrial properties
Past Industrial rental transactions
Listings for industrial property
Past Industrial sale transactions

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