The Business Times | Posted: 29 March 2013
JTC Corporation has launched an industrial site at Loyang Way for sale by public tender, under the Industrial Government Land Sales programme.
The 222,092 square foot site has a gross plot ratio of 2.5. It is zoned for Business 2 development, and has a 30-year lease. Strata-subdivision is allowed for the site.
Desmond Lim, associate director at CBRE Research, said the low supply of such sites in the area would likely spur interest in the Loyang Way plot.
"There have not been any government land tenders in this area since 2005 at least, and this is the only plot for tender in the first half of 2013. In addition, there is limited supply of available plots in the area. The site should therefore see healthy interest from a number of bidders," he said.
"Bids are likely to stem from end-users who are in the aerospace or engineering industries as those are the main tenants in the area currently. This would allow the end-user to obtain economies of scale from being located closely to similar firms," he added.
"Logistics providers could also be interested in the site, given the site's proximity to Changi airbase, coupled with the relatively high plot ratio and large site area."
Tan Boon Leong, executive director of industrial services at Colliers International, shared this sentiment. "Assuming there are no restrictions on the strata title, there should be a good number of developers bidding for this location. It is a rare site for strata title sale," he said.
Mr Tan drew comparisons to the sale of an industrial site in Tuas last month, where strong demand saw the site draw eight bids, topped by Soon Hock Group's $102.18 per sq ft per plot ratio (psf ppr) offer. He suggested the Loyang Way site might see even higher bids, estimating a $100-120 psf ppr range.
Mr Lim was even more optimistic, predicting a winning bid of over $130 psf ppr.
However, Nicholas Mak, executive director of research and consultancy at SLP International, was concerned about the shape of the plot.
"Its irregular L-shape and narrow length could make building a multi-storey structure challenging," he said.
Mr Mak expected a much lower price of around $50-70 psf ppr for the site.
JTC advised interested parties to purchase a developer's packet containing more information on the site. The tender closes on May 9 at 11am.
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