Two properties have been offered to players in the property investment sales market. One is a six-storey commercial property called Boon Building, located at 61 South Bridge Road, and an industrial site at Kaki Bukit Avenue 4, which can be found through the reserve list of the government.
The site at Kaki Bukit has a 2.5-plot ratio and 323,133 sq ft land area. This indicates that the maximum gross floor area translates to a massive 807,833 sq ft. It is zoned for Business 2 and is suitable for general industry, clean/light industry and warehousing.
Based on the reserve list system, the state will only launch the plot for tender, if a developer will apply with a minimum bid price that is acceptable to the government.
Tan Boon Leong, industrial director of Colliers International, reckons that the leading bids for the site could reach $70–80 per sq ft per plot ratio (psf ppr). This translates to around $56.5 million to $64.6 million of land cost. Compared to an earlier site in Kaki Bukit Road 2 that was sold in August 2009 after generating a total of 81 bids, the plot is in a lesser location according to Mr. Tan. “The latest plot is farther away from the main mature industrial estate in the Kaki Bukit/Eunos area.”
KNG Development obtained the earlier plot for about $105 psf ppr or $12.1 million. It is around 1.07 hectares with a plot ratio of 1.0 and is also zoned for Business 2 use, but came with a lease period of 30 years.
Mr. Tan said that the latest plot, which is located in Kaki Bukit Ave 4, has a great appeal potential to developers, who may then build flatted factories and landed terrace factories to sell to end-user industrialists.
“Perhaps some of the unsuccessful bidders at the earlier tender may bid for the latest plot,” said Mr. Tan. “However, as the latest site is much larger in terms of land area as well as gross floor area, developing it will entail a bigger investment. Hence, it will likely fetch a lower psf ppr unit land price.”
Sim Lian clinched in October 2008 a 1.15-ha, 60-year leasehold site with 2.5 plot ratio in Ubi Ave 4. It is zoned for Business 1 use for $85.05 psf ppr or $26.3 million.
Raffles Point Holdings is responsible for the sale of Boon Building, a 999-year leasehold property. The indicative guide price range of the property is $12-13 million, which works out to $1,165–$1,262 psf based on the 10,299-sq-ft estimated net lettable area.
DTZ is responsible for marketing the property through a tender exercise that will close on December 17, 2009.
“The property’s appeal lies in the building’s excellent location and investment quantum. The availability of naming rights also offers the opportunity to carve out a flagship building with its own corporate identity,” said Shaun Poh, DTZ senior director for investment advisory services.