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The Fairy Point Hill site in Changi - launched by the Urban Redevelopment Authority for development into a recreational club, hotel or chalets - could fetch about $45 million or $250 psf of potential gross floor area based on a 30-year lease.

This estimate comes from Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean, who reckons the site would be most viable as a resort hotel, given the recent development of infrastructure nearby. Also, Ms Chee notes: ‘This particular area has traditionally been laidback and has that resort feel.’

The spruced-up Changi Village Hotel has been achieving high occupancy and room rates, pointing to the viability of a resort hotel at Fairy Point Hill, she says. Using the site for a recreational club might not generate a sufficient return given the chequered financial performance of such clubs in Singapore and the short tenure of the site.

The 4.2-ha Fairy Point Hill site includes the old Commando Headquarters, which will have to be restored. The grand two-storey neo-classical building, built by the British in 1935, sits atop a hill. The maximum gross floor area (GFA) allowed for the project is 179,337 sq ft. The GFA for the old Commando HQ is about 29,063 sq ft. The site is wooded with many mature trees, some of which must be kept. URA says the release of the site will help realise its vision of Changi Point being developed as an attractive seaside resort and recreational destination while protecting rustic charm. The tender for the site closes on June 20.

Source : Business Times - 29 Mar 2007

ALLGREEN Properties has put in the highest bid of $72.3 million for a thin strip of residential land on Handy Road, next to Plaza Singapura.

A new residential development on the site - a short distance from Orchard Road - would enhance the area’s vibrancy and boost property values, say analysts.

The Urban Redevelopment Authority tender for the 3,586 sq m site closed yesterday after drawing four bids. The second-highest bid of $70.4million came from Alliance Development. The other two bids were $68.65 million and $50.5 million.

Allgreen’s bid works out to $669 per sq ft (psf) of potential gross floor area.

Some consultants had expected higher bids as they reckoned that a new development could sell for as much as $1,500 psf to $1,600 psf.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Singapore, said Allgreen’s bid is ‘reasonable’ and works out to a break-even price of about $1,000 psf. The 99-year leasehold site has a height limit of 10 storeys and a maximum gross floor area of 10,041 sq m.

Mr Li said the units of the new project on the site are likely to be sold for $1,300 psf on average.

This takes into account that sub-sale prices of units in the neighbouring 8 @ Mount Sophia project have risen above $1,000 psf and those at the nearby 50-unit freehold Nomu development are selling at $1,100 psf to $1,300 psf.

The site for Fraser Centrepoint’s 8 @ Mount Sophia, which achieved an average price of $730 psf in 2005, cost just $280 psf.

‘The new project will be attractive to home owners and investors because it is strategically located next to Dhoby Ghaut MRT Station,’ said Mr Li. It is also close to The Atrium At Orchard, the cineplex at The Cathay and the Singapore Management University campus.

The Cathay has 76 apartments for lease on levels nine to 17. And when the new condos are ready, the area will have more residents.

The area could liven up further if the collective sales of older mixed developments Peace Centre and Parklane Shopping Mall around the corner succeed.

Peace Centre and the adjoining Peace Mansion were just recently put up for sale at an indicative price of $470 million.

GOOD LOCATION

‘The new project will be attractive to home owners and investors because it is…next to Dhoby Ghaut MRT Station.’MR LI, of CB Richard Ellis

Source : Straits Times - 29 Mar 2007

Move expected to ease office space crunch

The tight office supply situation may ease as a result of two 99-year leasehold sites being offered by the government - a reserve list site on Anson Road, behind the Icon condo, and a confirmed list plot at Tampines Regional Centre.

The first offers an opportunity to develop a prime office building in the Tanjong Pagar area, at the gateway to the Central Business District, with good-size floor plates of about 18,300 sq ft.

The second is in an established back-office hub for financial institutions and business support services.

CB Richard Ellis expects the Anson Road site to contribute about 330,000 sq ft of offices and the Tampines plot about 300,000 sq ft.

The Anson Road plot, being on the reserve list, will only be launched for tender if a developer undertakes to bid at a minimum price acceptable to the state.

CBRE expects the site to be awarded for about $850-$900 psf of potential gross floor area, translating to an absolute land bid of $326 million to $345 million.

CBRE executive director Li Hiaw Ho said this is the second reserve-list commercial plot at Anson Road that is open for application.

Knight Frank director (consultancy and research) Nicholas Mak predicts the site will fetch $850-$950 psf ppr. Based on the lower end of this range, the breakeven cost for a new office project could be $1,790 psf.

Assuming that monthly gross rents for new office space in the location rise from the current $8 psf to $10 psf by the time the development is completed, the net yield could work out to about 5.4 per cent.

Mr Mak reckons the site will appeal to mid-size developers, tie-ups between funds and developers, and joint ventures between funds and contractors.

But he points to one drawback - the plot’s triangular shape, which means that while the side facing Anson Road has good frontage, the other two sides are without much of a view.

As for the Tampines plot, Mr Mak predicts a slightly lower bid of $750-$850 psf per plot ratio. ‘This site is likely to be fairly popular, with about four to six bids,’ he said.

CBRE’s Mr Li reckons the Tampines site could be awarded in excess of $500 psf ppr, working out to over $180 million. The tender for this plot closes on May 15.

While the two sites announced yesterday will help ease the office shortage, the plot that CBRE’s Mr Li and other market watchers are waiting for is at Central Boulevard, just behind the One Shenton condo. This could be potentially developed into about 930,000 sq ft of offices and is slated for launch only in May.

‘In view of the critical shortage of office supply, the market is also hoping that the government would accelerate the land sales programme,’ Mr Li said.

CBRE figures show Grade A office rent has risen 20.8 per cent since the end of last year to an average $10.55 psf a month now.

The increase over the year-ago period has been a staggering 75.8 per cent, which has sparked concerns in some quarters about Singapore losing its competitiveness.

Source : Business Times - 21 Mar 2007

Two land plots where developers can build new office buildings are set to come on the market soon.

One is in the Central Business District while the other is in Tampines Regional Centre.

The CBD plot is at the junction of Anson Road and Enggor Street, behind the upcoming Icon condominium.

It has a land area of 39,000 sq ft and can host an office building with a total floor area of about 383,000 sq ft.

The plot’s size will also allow ‘good-sized floor plates of about 18,000 sq ft’, a coveted feature in office blocks, the Urban Redevelopment Authority (URA) said.

The URA released this 99-year leasehold site on to its reserve list yesterday. Interested developers can apply to have the site launched for public tender by submitting a bid that meets the URA’s reserve price.

Property consultants expect keen interest in this plot, in view of the acute supply crunch in prime office space.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, said that top bids for the land are likely to be between $326 million and $345 million, or about $850 to $900 per sq ft per plot ratio (psf ppr).

The site is ‘likely to be popular with medium-sized developers, or joint ventures between funds and developers or contractors’, added Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Meanwhile, the HDB is launching another 99-year leasehold office site, at Tampines Grande, today.

The 86,000 sq ft plot is located next to the AIA Building on Tampines Avenue 5. It can be built up to 360,000 sq ft of gross floor area.

Mr Mak expects this Tampines site to be ‘fairly popular’, with about four to six bids ranging from $750 to $850 psf ppr.

Regional centres such as Tampines are also seeing an increase in demand for office space as rising rents in the central areas force firms to relocate some operations.

‘There could be demand from financial firms for their backroom operations in non-CBD areas where the cost is lower,’ he said.

Source : Straits Times - 21 Mar 2007

AN unnamed developer has entered a bid of $79.4 million for a 0.24 hectare hotel site at the corner of Tanjong Pagar Road and Gopeng Street, triggering a public tender for the site. Market watchers, however, reckon that the plot could fetch around $100 million in the tender.

The site has a plot ratio of 8.4, giving it a maximum potential floor area of 19,900 square metres, which means that the trigger price works out to about $370 per square foot (psf) of gross floor area.

However, a price tag of around $500 psf is achievable, said Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean.

‘Looking at past transactions, bids were all around $500 psf,’ Ms Chee said. ‘The winning bid will probably be about the same.’ At $500 psf, the price for the site works out to $107.3 million.

This site is the first hotel site to be triggered for sale from the reserve list in 2007. Under the government’s reserve list system, a site is only offered for public tender if it receives an application from a developer who commits to bid for the site at a price which is acceptable to the government.

URA has received an application from a developer who has committed to bid a price of at least $79.4 million for the site. The government body said that the identity of the applicant will not be released.

URA will launch the public tender for the site in about two weeks’ time. The launch date will be announced later and about nine weeks will be set aside for the tender.

‘The land parcel is conveniently situated in close proximity to the Tanjong Pagar MRT station, which will provide hotel guests the convenience of travelling to other parts of the city and the rest of the island,’ said URA. ‘Complementary retail, restaurant and entertainment uses within the development will also add to the diversity of amenities and vibrancy of the area.’

Source : Business Times - 15 Mar 2007