Friday, August 31, 2012

Top bid for Yishun industrial site beats expectations

Business Times: Fri, Aug 31

A STATE tender for a 30-year leasehold industrial site at Yishun Avenue 9 has attracted a higher-than-expected top bid of $51.388 million, or $95.13 per square foot per plot ratio, (psf ppr) from Soon Hock Tuas Development.

This was 12.7 per cent above the second highest offer of $84.41 psf ppr by a partnership between Capital Development and ZACD Investments. In third position was Soilbuild Group Holdings, which priced the site at $71.06 psf ppr.

In all, the Urban Redevelopment Authority tender yesterday drew eight bids. The 2-hectare plot (parcel 5) is across the road from a 1.2-hectare site (parcel 6) - also on 30-year tenure - that was recently triggered for launch from the government's reserve list, with an undertaking from the successful applicant to bid at least $14.2 million (or $45.03 psf ppr).

Both sites are zoned for Business 1 use, with a 2.5 plot ratio (ratio of maximum gross floor area to land area) and can be strata subdivided. Permitted uses for Business 1 zoning include light industry, clean industry, utilities and telecoms.

Soon Hock group - the top bidder at yesterday's tender (for parcel 5) - is fully owned by Tan Yeow Khoon. He and his brother Tan Yeow Lam are major shareholders of mainboard-listed Cogent Holdings Limited, the parent of SH Cogent Logistics.

Savills Singapore director of industrial and business space Dominic Peters told BT yesterday evening that he had expected parcel 5 to fetch a top bid in the $70-80 psf ppr range.

Colliers International director (industrial) Tan Boon Leong's forecast was about $70 psf ppr. He estimates Soon Hock's break-even cost for a new strata industrial project at about $220-240 psf. "On average, they should be able to sell units at above $300 psf, with ground-floor units commanding at least $400 psf and upper-floor space, around $280-310 psf," Mr Tan added.

Soon Hock chairman Tan Yeow Khoon told BT he plans to develop the Yishun Avenue 9 plot into a ramp-up development with strata industrial and warehouse units. This could be a multi-storey project of about eight to 10 storeys but plans have yet to be firmed up, he said.

This will be Soon Hock's fifth strata industrial project in Singapore for sale. It has completed Tuas Cove Industrial Centre and T5 @ Tampines which are both fully sold. It is also building Bartley Biz Centre at Kaki Bukit Road 4, which is around 75 per cent sold.

Earlier this year, the group clinched an industrial site at Serangoon North Avenue 4 on which it is planning to launch a ramp-up /flatted factory facility in Q1 next year.

On Tuesday, Soon Hock group lost out to property giant Far East Organization at a URA tender for a 99-year leasehold private housing plot at Farrer Road, next to Lutheran Towers.

Soon Hock bid $44.3 million or $1,072.73 psf ppr, or about 3 per cent below Far East Soho's top bid of $1,107.80 psf ppr.

The plot can be developed into a maximum of 54 apartments.

The lowest bid at yesterday's tender for Yishun Avenue 9 (parcel 5) was from Wee Hur Development - at $25.3 million or $46.83 psf ppr. Others participating at the tender include Oxley Sparkle ($70.56 psf ppr), OKH Holdings, Vantage Properties and KNG One.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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