Business Times: Thu, Dec 01
A COMMERCIAL and residential site that will be integrated with three transportation nodes - the Bukit Panjang LRT and MRT stations and a bus interchange - attracted 10 bids at a state tender yesterday.
The top bid, from two Sim Lian entities, was for $805.26 per square foot of potential gross floor area, or 10.7 per cent higher than the second highest bid of $727.36 per square foot per plot ratio from two Keppel Land units.
The third highest bid, from a partnership between United Engineers unit UED Capital Venture and Singapore Press Holdings' Earth Holdings, was $679.65 psf ppr.
Sim Lian is expected to develop a retail and condo project on the 99-year leasehold site.
The Urban Redevelopment Authority (URA) has specified that a minimum 35 per cent and a maximum 40 per cent of the 612,078.41 sq ft maximum gross floor for the site has to be set aside for commercial use.
When the site was launched on Oct 11, Credo Real Estate executive director Ong Teck Hui predicted that it would draw six to 10 bids with a top bid of $600-$700 psf ppr. Yesterday he said that the recent hype created from the launch of Bedok Residences, next to Bedok MRT Station, at an average price of $1,350 psf probably contributed to the optimistic sentiment at yesterday's tender.
He also noted that mixed-use developments comprising residential and commercial use have generated keen interest among home buyers, especially if they are also integrated with transportation facilities.
'The attraction is the convenience of being right at the doorstep of shopping and transport amenities which is appreciated by owner-occupiers and investors as these are strong selling points to tenants.
'There are not many commercial/residential sites in the Government Land Sales programme and such sites tend to be competitively bidded for when offered for tender. The Bedok Residences site attracted nine bidders resulting in a top bid of $841 psf ppr in September 2010 while the Punggol Central site fetched a top bid of $752 psf ppr with seven parties contesting in February 2011,' he added.
An analyst estimates that assuming Sim Lian is targeting an average selling price of $1,300 psf for the residential component, the valuation for the retail component (inclusive of a 15 per cent profit margin) would be $2,700 psf.
This assumes that the mall's efficiency ratio (ratio of net lettable area to gross floor area) is 65 per cent; if the efficiency ratio goes up to 80 per cent, the retail valuation would be lower at $2,200 psf.
URA will give the developer of the latest plot at the junction of Jelebu Road and Petir Road seven years to complete the mixed development.
Other bidders at yesterday's tender included Empire Square Investments and Newston Developments, each a partnership between City Developments and Hong Leong Holdings ($671.82 psf ppr). Also bidding at yesterday's tender was a joint venture between Wing Tai's Wingstar Investment and Mercatus Retail Development (a unit of a co-operative whose shareholders are said to include NTUC Income and NTUC FairPrice); its bid was $657.36 psf ppr.
BBR Property, Guthrie, SK Land and Sun Venture Group teamed up for a $595 psf ppr bid while Frasers Centrepoint group units Aquamarine Development and FC Commercial Trustee bid $572.31 psf ppr. Far East Organization's Kentish View joined forces with Sekisui House to offer $571.82 psf ppr. A partnership involving Jack Investment and Teneriffe Development, both linked to Han Chee Juan, offered $516.27 psf ppr. The lowest bid, from Kheng Leong unit Peak Shines, was $408.44 psf ppr.
Separately, URA yesterday released the detailed sales conditions for a white site in the established commercial hub at Novena under the reserve list.
Developers keen on the site - at the corner of Thomson and Irrawaddy roads - can apply for its release accompanied with an undertaking of a minimum bid price.
If this minimum price is acceptable to the government, the site will be launched for tender.
The land parcel can have a maximum gross floor area of about 301,852 sq ft - of which at least 30 per cent must be for hotel use and the rest for residential, office, retail and other complementary commercial uses.
Source: Business Times © Singapore Press Holdings Ltd
Martin Koh/ Sherry Tang