Big bids expected for Somerset Central
THE second commercial site near Somerset MRT Station - made available for application yesterday by the Urban Redevelopment Authority (URA) - is expected to fetch more than the first plot, the former Glutton’s Square site, that was sold to Far East Organization in January for $1,085 per square foot of potential gross floor area.
A property consultant and a developer separately told BT that at most, the top bids for the latest reserve list site, dubbed Somerset Central, could be about 5 per cent higher.
Knight Frank director Nicholas Mak predicts the top few bids will fall within the range of $1,050 to $1,155 psf per plot ratio, working out to total bid quantums of about $445 million to $490 million.
The developer said: ‘This will be the last chance to get a sizeable commercial site along Orchard Road.’
And the property consultant said: ‘At best it will be 5 per cent more than the Glutton’s Square site. Of course, someone can go higher. It depends on how desperately they want this site.’
Most market watchers reckon Far East Organization could be the most motivated bidder for the latest 99-year leasehold site, as it would enable the property giant, which has been on a land buying spree lately, to boost its hold in the Orchard area. Market watchers say the development of the two sites will increase pressure on OCBC to do something about its ageing Specialists Shopping Centre/Hotel Phoenix complex sitting between the sites.
OCBC spokeswoman Koh Ching Ching said yesterday the bank intends to hold its property for long-term investment. ‘The hotel-cum-commercial complex is in need of refurbishment, and it may be appropriate to do so in conjunction with the oncoming developments at the Glutton’s Square and Somerset Central sites,’ she said. ‘We appreciate the vision to inject vibrancy into the Orchard Road area, and we’ll explore possibilities as we find out more about these developments.’
Property observers consider the Somerset Central site’s location to be superior to the Glutton’s Square plot as the former is closer to Somerset Station.
Somerset Central comprises about 0.7ha of land above Somerset Station, is zoned for commercial use and will yield a total gross floor area (GFA) of about 424,205 sq ft. At least 60 per cent of GFA must be for retail, food and beverage or entertainment use. The rest can be for other commercial, hotel or residential use. Most market watchers however expect the successful bidder to build a pure-retail project as a mixed development may entail separate car parks, lifts and entrances - which will eat into the project’s lettable area.
The property consultant pointed to other drawbacks of the latest site which would cap developers’ bids: ‘The Somerset Central site is narrow, and there’s a canal,’ he said. ‘Assuming the developer uses the entire site to build a mall only, he will have no choice but to build upwards. Vertical transport like lifts will impact on efficiency.’ Efficiency refers to the ratio of net lettable area to gross floor area.
Putting things in perspective, the developer said the centre of action along Orchard Road will clearly be the new mall to be developed at the Orchard Turn site, which was awarded in December to CapitaLand and Sun Hung Kai Properties.
The developer of the Somerset Central site will be required to build a deck over part of the Stamford Canal to create an open pedestrian mall lined with shops and outdoor refreshment areas. The developer will also have to provide a walkway at street level, providing pedestrian passage between Orchard and Somerset roads through the building. The Somerset Central site, being on the reserve list, will only be released for tender upon successful application by a developer undertaking to offer a minimum price acceptable to the state. Its award will be solely on price.
A Design Advisory Panel will guide the developer in the project’s design after the tender has been awarded. Singapore Tourism Board is also expected to release soon a short-term lease site next to Faber House.
Source : Business Times - 29 Mar 2006
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.