The Business Times | 12 April 2013
ZACD and Bohai's offer of $81.19 psf ppr is 19.4% above next highest bidder
[SINGAPORE] The tender for a 2.5 ha plot in Tuas Bay Close has closed with a top bid of $37.1 million, from among the four received. The offer, a joint bid by ZACD Investments, formerly known as SLP Property Investments, and Bohai Investments (Sengkang), works out to $81.19 per square foot per plot ratio.
Bohai is a subsidiary of Bohai Investments Group, a company incorporated in 2011 and which counts Welltech Construction and a number of Chinese individuals as its stakeholders.
The 30-year-tenure land parcel, put up for tender by JTC Corporation at end-February, has a plot ratio of 1.7 and is zoned for Business 2 development.
ZACD and Bohai's offer was 19.4 per cent above the next-highest bidder OKH Holdings's $31.08 million, or $68.01 psf ppr. The bid was 45.61 per cent more than the third-highest bid of $25.48 million, which translates to $55.76 psf ppr, from Tuas One. Soilbuild put in the lowest bid of $33.09 psf ppr.
The tender results drew mixed readings from analysts. Savills Singapore's industrial director Dominic Peters said the top bid was a high price for the location, which he described as not very ideal. The plot ratio means that the development has to be multi-level, likely a ramp-up factory. "Industrial developers are pretty cautious about the site. That's why there are only four bidders," he said.
He added that OKH's offer would have been a better benchmark and the range set by it and Tuas One would have been in a more accurate price range, "given that location and the current market situation".
On the other hand, the value of the top bid fell within the expectations of executive director of industrial services at Colliers International, Tan Boon Leong.
"Anything from $70 to $100 for Tuas is within expectations," he said. In March, JTC had awarded a 3.96 ha plot on Tuas South Avenue 10 to the Soon Hock Group for $61 million, or $102.18 psf ppr.
He said the prices in the latest tender had fallen short of the $100 mark due to the plot's features and conditions of the tender.
"The plot is a long narrow strip. You may lose out in terms of frontage and, if you want to be visible, then it is not as good as the ones facing major roads, like previous sales of sites that were along the major roads of Tuas South Avenue 3 and Tuas South Avenue 5," said Mr Tan.
The conditions of the tender include a requirement that the successful bidder build at least 12 factory units, of which 10 are contiguous and 1,000 sq m each, and two are factory units of 3,000 sq m.
"These units are bigger units and it is more difficult than usual to sell," he said.
But Mr Tan and Mr Peters agree that the units will be selling at around $300 psf. "On the ground level, we're talking about $350 to $400 psf; on the upper floor, we're talking about anything from $250 to $300 psf," said Mr Tan.
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