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BOUTIQUE developer Sim Lian Land has beaten six other bidders to put in the highest offer for a condominium site in Bishan Street 22.

It offered $310 million for the 99-year leasehold site, which has an area of 235,897 sq ft. This works out to $375 per sq ft per plot ratio (psf ppr), which means the break even cost would be $650 to $680 psf ppr, estimated CBRE Research executive director Li Hiaw Ho.

Meanwhile, an unnamed developer has committed to bid at least $30 million for a land plot in Woodsville Close in Potong Pasir.

The 40,903 sq ft, 99-year leasehold residential site will be put on the market by the Government in about two weeks’ time.

Property consultants estimated that bids for the site could come in at between $32.7 million and $45 million. This would work out to between $280 and $385 psf ppr.

A project with about 90 to 100 units can be built on the site, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Source : Straits Times - 6 Jun 2007

$850-1,000 psf ppr likely for plot next to One Shenton

A white site behind One Shenton, launched yesterday and slated predominantly for office development, could fetch $850 to $1,000 per square foot of potential gross floor area, property consultants say.

This translates into bids of $1.22 billion to $1.43 billion. And some analysts reckon that the price could go even higher.

The tender for the 110,206 sq ft site - offered on a 99-year lease by the Urban Redevelopment Authority - closes on Sept 19.

At least 70 per cent of the maximum 1.43 million sq ft of gross floor area must be developed as offices. Assuming the successful bidder puts up an all-office development, the net lettable space could be just over one million sq ft.

The development can rise higher than 40 storeys. And if roof forms are included, the maximum height can go beyond 50 storeys.

CB Richard Ellis executive director Li Hiaw Ho says that the site could fetch around $900 to $1,000 psf per plot ratio (psf ppr), which would result in a breakeven cost of $2,300 to $2,500 psf for the completed office project.

Using a yield-based approach and assuming gross monthly average rent of $12 psf and a capitalisation rate of 4.5 per cent, the value of the completed project would be about $2,600 psf.

Mr Li also notes that $2,500-2,600 psf capital values are in line with current office transactions. BT reported last week that Hong Leong Group had received an offer of about $2,500 psf for 1 Finlayson Green and has since learnt that this offer, from a European property fund, may actually be higher.

Knight Frank managing director Tan Tiong Cheng predicts a slightly lower price of $850 to $900 psf ppr, saying that bidders may take a cue from last month’s sale of nearby UIC Building for $870 psf ppr. He expects the URA site to draw at least four to five groups of bidders.

Taking a more upbeat view, Credo Real Estate managing director Karamjit Singh predicts that the top bid is ‘certain to go over $1,000 psf ppr’ because of interest from overseas institutional investors like funds. ‘Their perspective on target returns and market outlook may be rather different from local developers,’ he said.

Agreeing, a seasoned market watcher - alluding to the office glut that plagued Singapore a few years ago - pointed out: ‘Local players know local history.’

Some investors may now be concerned that the government could release a slew of new office sites - on 99-year leases and short tenures for temporary structures - to alleviate the current shortage of space.

Still, CBRE’s Mr Li expects URA’s latest site to draw strong bidding. ‘The future CBD will be in the Marina Bay area and if you want to be in the office market, you have to be there,’ he said.

Knight Frank director and head of research and consultancy Nicholas Mak reckons that the authorities would only release additional office sites selectively, knowing that new developments can be completed only after the first phase of the Business and Financial Centre is ready in early 2010.

The government’s proposal to offer short-tenure sites for temporary or ‘transient offices’ will have limited appeal, he said. ‘Big international financial institutions and other users concerned about image will probably not find such premises appealing. However, perhaps some smaller local firms facing pressure from rising rents - like architectural firms and law firms - may consider them.’

Source : Business Times - 31 May 2007

Prime 1.02ha site likely to draw major developers, say consultants

BLUE-CHIP property players from across the region are expected to do battle for a prime piece of Marina Bay land released for tender yesterday.

Bids of well above $1 billion - although one expert tips $2 billion or more - are expected for the 1.02ha site behind One Shenton and The Sail @ Marina Bay condominiums.

A project of about 40 storeys can be built on the land, but 70 per cent of the gross floor area must be given over to offices. The rest of the space can hold more offices, hotel rooms, homes or shops.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, expects bids to come in at between $830 million and $1.09 billion, based on recent government land sales and an assumed rental yield of about 6.5 per cent to 7.5 per cent.

This range works out to $580 to $760 per sq ft per plot ratio (psf ppr), he said.

But Ms Tay Huey Ying, Colliers International’s director of research and consultancy, expects even higher bids - ‘upwards of $1 billion, or $750 psf ppr’, with the winning bid ‘likely to be above $2 billion’.

The likely contenders ‘include all the major local blue-chip developers’, Mr Mak said.

These would be CapitaLand, Keppel Land, Lippo Group, Far East Organization and City Developments, which is the developer behind One Shenton and The Sail.

Foreign funds could also tie up with local developers for the tender bid, he said.

The consortium building the nearby Marina Bay Financial Centre (MBFC) - Keppel Land, Hongkong Land and Cheung Kong Holdings - may also be interested, said consultants.

‘Other office players who have yet to have any presence in this new downtown of the future may also take this opportunity to form consortiums to participate in this tender,’ said Ms Tay.

She added that a winning bidder may want to build homes or service apartments along with the required offices.

But Mr Mak, who estimated that the project could accommodate 400 two-bedroom units, said homes were an unlikely option because the developer would also have to allocate more space for carparks.

The site, which opens up directly to a public open space, can be built up to 200m, or over 40 storeys.

It will be connected to surrounding developments such as One Raffles Quay, One Marina Boulevard, the MBFC and One Shenton through a network of underground walkways and second-storey links, the Urban Redevelopment Authority (URA) said.

The site will be served by a common services tunnel, a system of underground tunnels that house and distribute utility service lines such as power and telecommunication cables, the URA added.

This means future tenants will have an uninterrupted supply of major utilities and emergency back-up services.

The site - part of the Government’s plan to rejuvenate the Marina Bay area - will be awarded based solely on the tendered price, said the URA.

Developing the land ‘will help to build up the critical mass of office space in the Marina Bay area and develop the area as an international business and financial hub’, it added.

FOCUS ON OFFICE SPACE

A project of about 40 storeys can be built on the site, but 70 per cent of the gross floor area must be given over to offices. The rest of the space can hold more offices, hotel rooms, homes or shops.

ESTIMATES OF BID AMOUNTS

Knight Frank’s Mr Mak expects bids for the site to come in at between $830 million and $1.09 billion, while Colliers’ Ms Tay predicts that the winning bid is likely to be above $2 billion.

Source : Straits Times - 31 May 2007

It puts up price of $123m for 99-year plot at Gopeng St next to the Amara

HONG KONG tycoon Li Dak-sum’s Carlton group yesterday emerged as the top bidder for a 99-year hotel site at Gopeng Street next to the Amara Hotel in the Tanjong Pagar area. Carlton put in a $123 million bid.

The only other offer for the site came from Republic Hotels and Resorts, part of Millennium & Copthorne Hotels plc, which bid $118.21 million.

Carlton’s bid works out to $573 psf per plot ratio, which market watchers say is the highest for a 99-year hotel site in recent years.

In November last year, Hong Leong Group bagged a site at Mohamed Sultan Road for $518 psf per plot ratio.

In January this year, Far East Organization paid $501 psf ppr for a hotel plot next to Novena MRT Station.

Mr Li’s son, Richard, who is managing director of Carlton Hotel (S) Pte Ltd, yesterday evening told BT that the group expects to pump a further sum of $140 million in construction costs and fees for its proposed hotel development at Gopeng Street, bringing the all-in cost to around $263 million.

‘We are looking at two scenarios - a limited service hotel with about 400 rooms or a more up-market, hip hotel, with about 380 rooms,’ Richard Li said, indicating that for now, the group is more inclined towards the former option as ‘there are not many of this type of hotels’.

If the group goes for a 400-room hotel, the break-even cost would be $657,000 per room, which hotel analysts say is one of the highest for a hotel development or transaction in Singapore in recent years. ‘For instance, the Intercontinental Singapore last year changed hands for $611,000 per room, and the recent sale of Novotel Clarke Quay was reported at $552,000 per room,’ HVS International Singapore managing director David Ling observes.

Carlton’s bid reflects its confidence in the Singapore tourism sector, he said.

‘The market is conducive for new hotel developments now that we have concrete plans going ahead - two integrated resorts with casinos, Formula 1. These are all positive demand generators coming on line,’ Mr Ling reckons.

Mr Li of Carlton Singapore acknowledges that his group’s bid at yesterday’s state tender was high but ‘we wanted to get the site’, he said.

‘We basically want to do another hotel in Singapore,’ he said. ‘Of course, based on today’s room rates, the venture is not very profitable. But we expect demand to be higher in the years to come.’

Mr Li indicated the group does not have plans for further hotels in Singapore for the time being.

In early 2005, Carlton clinched a plot next to its Carlton Hotel at Bras Basah Road for $55.6 million. It recently began construction on the site for a 300-room extension to the existing hotel.

The total cost for developing the new wing (inclusive of the land price) is about $175 million, reflecting a cost per room of about $583,000. The extension is expected to be ready around 2009.

The 25,543 sq ft site site at Gopeng Street can be developed up to 30 storeys high.

It could be completed around 2010.

Source :  Business Times - 29 May 2007

URA reserve list hotel site near Lavender MRT Station available for application

INVESTORS looking for hotel development sites have just been given a choice of three properties in the Balestier/Lavender area.

Balestier Tower

The Urban Redevelopment Authority (URA) yesterday made available for application a 99-year leasehold reserve list site at Jellicoe Road opposite Lavender MRT Station.

And the freehold Ruby Plaza and adjoining Balestier Towers are being offered for collective sale.

Realtorhub Real Estate, which is marketing the two adjoining properties through separate sale exercises, said the joint owners expect bids above $670 per square foot of potential gross floor area.

Based on this unit land price, the price for Ruby Plaza would be at least $79 million and that for Balestier Towers at least $60.3 million.

Ruby Plaza is on a 39,493 sq ft site and Balestier Towers on 29,986 sq ft. Both sites are zoned for commercial and residential use with a 3.0 plot ratio - the ratio of maximum potential gross floor area to land area - under Master Plan 2003.

Ruby Plaza has received outline planning permission for hotel use and Realtorhub believes the same permission will probably be given for Balestier Towers.

Realtorhub director Daniel Ng believes developers could also seek URA permission to redevelop the sites into a medical centre, to capitalise on strong demand for such space.

As for the 45,408 sq ft hotel site at Jellicoe Road being offered by URA, CB Richard Ellis executive director Li Hiaw Ho reckons it can be developed into a hotel with about 400 rooms.

He estimates the site could fetch slightly more than $420 psf per plot ratio achieved for the tender of URA hotel site at Belilios Road this week.

This is because the Jellicoe Road plot has a better location and easy access to the MRT.

Source : Business Times - 24 May 2007