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THE tender for a transitional office site in Mohamed Sultan Road has closed with only one bid of $4.65 million, from RSP Architects Planners and Engineers.

Based on the 66,482 sq ft site and maximum permissible gross floor area (GFA) of 99,727.5 sq ft, the bid equates to a unit land price of $46.67 per sq ft per plot ratio (psf ppr).

Knight Frank director (research and consultancy) Nicholas Mak said this is the second-lowest bid received for such a site.

In January, a site at Aljunied was not awarded after the Urban Redevelopment Authority (URA) rejected the sole bid of $38.37 psf ppr.

Mr Mak said RSP’s bid reflects the ‘turbulence in the markets and the knowledge that there is a lot of supply coming up’. He doubts URA will award the Mohamed Sultan Road site as it might encourage opportunistic bidding, especially as the tender for another transitional office site is set to close next month.

Transitional office sites were introduced in 2007 as a stopgap measure to address an office space crunch.

RSP’s present office is in Scotts Road. It would likely build an office for its own use on the Mohamed Sultan site, though Mr Mak said that based on the permissible GFA, it would also be looking to lease out the remaining space.

The low bid comes as a surprise, especially as Mohamed Sultan is considered a central location.

Cushman & Wakefield managing director Donald Han said he expected bids to be at least half of those for two previous transitional office sites around Newton MRT, which were awarded at $242.50 and $226 psf ppr in April and May.

‘There is a chance the site will not be awarded as it would distort property prices,’ he said.

Perhaps more importantly, the market appears to have reached saturation point as far as demand for transitional office sites goes. ‘This will send a strong signal to URA,’ Mr Han said.

Source : Business Times - 15 Oct 2008

A TENDER for a transitional office site - aimed at easing the office squeeze in Singapore - in Mohamed Sultan Road has closed with just one bidder, and at a far lower-than-expected offer of $4.65 million.

The price for the 6,176 sq m plot, which has a 15-year lease, works out to $46.67 per sq ft of gross floor area. It came from local firm RSP Architects Planners & Engineers.

‘The bid is only one-fifth of the average land prices of the two Scotts Road sites which were awarded in April and May this year,’ said Knight Frank’s director of research and consultancy Nicholas Mak.

‘It is very conservative so there is a good likelihood that it may not be awarded.’

When the site was launched for tender in mid-August, Mr Mak had expected the bids to come in at between $10 million and $13 million. Another consultant had expected even higher bids of up to $18 million.

However, consultants generally agree that interest in such office sites will be subdued, given the poor market sentiment and the large supply of office space expected in 2010.

A building on the Mohamed Sultan site could be built in around a year, which is near the time when more office supply from buildings such as Marina Bay Financial Centre will pour into the market.

The Urban Redevelopment Authority will announce its decision at a later date, after it has evaluated the bid.

Earlier this year, the URA rejected the only bid - at $7.8 million or $38.35 per sq ft of gross floor area - submitted for a transitional office site in Aljunied Road because it was too low.

This Mohamed Sultan site is one of three commercial plots slated for sale through the confirmed list in the second half of the year. Confirmed list sites go up for tender on scheduled dates, regardless of developer interest.

The tender for a second transitional office site on the list, in Mountbatten Road, was launched last month and will close on Nov 18.

Source : Straits Times - 15 Oct 2008

The Urban Redevelopment Authority (URA) has awarded the tender for the hotel site at Kallang Road and Jellicoe Road to Citywide Land.

The company submitted the sole bid for the site at S$51 million.

The site has an area of 4,219.2 square metres and a maximum permissible gross floor area of 18,986 square metres.

URA said the site is conveniently located at the fringe of the city and situated above Lavender MRT Station.

It was offered for a lease period of 99 years.

Source : Channel NewsAsia - 13 Oct 2008

The Urban Redevelopment Authority has awarded the tender for an industrial site at Kallang Pudding Road to Orion-Four Development.

Orion-Four submitted the sole bid of S$10.8 million for the site which has an area of 5,743.2 square metres.

The site was launched for public tender on September 3 and the tender closed on October 7.

It was offered for sale on a 60-year lease. - CNA/ms

Source : Channel NewsAsia - 10 Oct 2008

A TENDER for a hotel site on Kallang Road has attracted just one bidder, who has lodged the minimum price allowed under the process.

Tenders typically attract prices above the minimum bid but on this occasion Citywide Land’s $51 million offer was right at the limit for the plot next to Lavender MRT station.

‘It’s a reflection of the highly uncertain market environment,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak. ‘And some developers may find it challenging to get funding for land purchases.’

The 99-year leasehold site is on the reserve list and was launched after an unnamed firm applied on Aug 1 for it to be put up for sale.

In the application, it had to commit to bid at a minimum price acceptable to the State, which was $51 million.

The bid from Citywide Land was right on the money at $249.6 per square foot per plot ratio for the 4,219 sq m site.

The Urban Redevelopment Authority said it will decide on the awarding of the tender after evaluating the bid.

When the application was made in August, Mr Mak had expected bids of between $400 to $450 psf, although he added that poor market sentiment or lower-than-expected visitor arrival numbers could bring bids down to $330 psf.

An unnamed consultant had reportedly expressed surprise that the site was even triggered given global economic concerns and soaring construction costs. Since then, the economic climate has worsened further.

The site has a maximum allowed gross floor area of 18,986 sq m, which could accommodate a hotel of up to 25 storeys. This means some of the rooms will have views of Kallang River, said Mr Mak. ‘This is a good hotel site. When the situation improves, the bidder will be seen as very lucky,’ he added.

Fellow consultant Ku Swee Yong, director of marketing and business development at Savills Singapore, said the low bid is not surprising as construction costs are still high.

‘To build a 3 1/2-star hotel, they have to bid low,’ he said.

Citywide Land is an unfamiliar name in the property market here.

Source : Straits Times - 10 Oct 2008