Three new industrial sites up for sale

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http://www.straitstimes.com/archive/saturday/premium/money/story/three-new-industrial-sites-sale-20130928

Three new industrial sites up for sale

Published on Sep 28, 2013

By Rachel Scully


THREE new industrial sites were put up for sale by public tender under the Government Land Sales programme yesterday.

The sale of the two sites in Tuas South Street 6 and 7 is "in line with the Government's efforts to make industrial property more affordable", said JTC Corp in a statement.

Both are zoned Business 2 developments - each with a lease tenure of 21 years and eight months, as well as a permissible gross plot ratio of 1.0.

Consultants say the two parcels will attract about five to 10 bids between $70 and $95 per sq ft per plot ratio (psf ppr). This means bids will start from $2.3 million for the smaller of the two plots at Tuas South Street 6.

Colliers International's executive director of industrial services, Mr Tan Boon Leong, said: "These two sites will appeal to end users, including small and medium-sized enterprises, as well as those in the furniture business and oil and gas industry."

The third and largest of the three sites is in Tai Seng Street and will be linked to the Tai Seng MRT station on the Circle Line via a direct basement connection.

At 126,000 sq ft, the plot has a lease term of 30 years and a permissible gross plot ratio of 3.5.

As it is zoned as a Business 2-White development, part of its premises will go towards retail, food and beverage or office use.

Consultants expect five to eight bids for this plot at rates between $250 and $300 psf ppr.

R'ST Research director Ong Kah Seng said: "Developers or bidders' interest is underpinned by Tai Seng as an evolving modern industrial location."

Local brands such as BreadTalk Group, Charles & Keith Group as well as Sakae Holdings have set up shop in the vicinity, he said.

When developed, the site will form "the epicentre of Paya Lebar iPark" - a hub for light manufacturing and lifestyle-related industries, said JTC Corp.

Tenders for the two plots in Tuas South will close on Nov 8, and on Nov 22 for the third plot in Tai Seng Street.

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http://www.businesstimes.com.sg/archive/saturday/premium/top-stories/plum-tai-seng-plot-among-three-sites-launched-sale-jtc-20130928

Published September 28, 2013

Plum Tai Seng plot among three sites launched for sale by JTC

The Tai Seng St plot, when developed, will form the epicentre of Paya Lebar iPark, says the statutory board

By Kalpana Rashiwala [email protected]


JTC Corporation is offering for tender a plum site next to Tai Seng MRT Station that is likely to house industries compatible with food manufacturing and at the same time offer retail, food and beverage (F&B) and office space.

The statutory board yesterday launched the site, zoned for Business 2-White use, along with two smaller plots on Tuas South Streets 6 and 7, under the confirmed list of the second-half 2013 Industrial Government Land Sales Programme.

JTC said the 1.18-hectare plot along Tai Seng Street, when developed, will form "the epicentre of Paya Lebar iPark", a pilot project by the statutory board aimed at attracting small and medium enterprises in the F&B, lifestyle, retail and light manufacturing sectors. Sakae Sushi, BreadTalk and Charles & Keith are among the well-known names that have set up operations in the park.

The proposed development on the site launched yesterday will house industries compatible with food manufacturing. To be sold on 30-year-leasehold tenure, the site has been allocated 3.5 maximum gross plot ratio, which means it can be developed into a project with 443,795.60 square feet maximum gross floor area (GFA).

Of this, at least 2.5 plot ratio (translating to 316,997 sq ft GFA) shall be built for Business 2 use and the remaining for white use. Of the white use, a minimum of 63,399 sq ft has been stipulated for retail use such as cafes, restaurants, food court and shops to support the working community in the Paya Lebar iPark. JTC said the site's zoning allows for a "mixed-use business community offering retail, F&B and office uses".

"The site is planned with a direct basement connection to the Tai Seng MRT Station and aims to capitalise on its strategic location to draw commuter crowd and inject vibrancy into the Paya Lebar iPark," it added.

The 1.18-ha (126,799 sq ft) site is being sold with a 7,920-sq-ft strip to provide vehicular access for pick-up and drop-off, and 2,336-sq-ft underground space for development into a pedestrian link to the MRT station.

Strata subdivision of the new development is not allowed for the first 10 years after Temporary Occupation Permit (TOP) is issued. After that, strata division is allowed with minimum unit size of 150 square metres (1,614.59 sq ft) GFA.

Tan Boon Leong, executive director of industrial services at Colliers International, reckons that the new development will be leased to occupiers such as restaurant chains (for their central kitchen), culinary schools or those in the food packaging business. He acknowledges the site's prime location but adds that the cost of constructing the underground pedestrian link could be an unknown factor in costing.

"I expect around six to eight bids, with the top bid around $280-300 per square foot per plot ratio (psf ppr)," he said. This translates to an absolute lump-sum price of $124.3 million to $133.1 million in land cost alone.

He drew reference to prices for two nearby sites sold in recent years. Last year, a 30-year-leasehold Business 2 site in Tai Seng Link was sold for $199.69 psf ppr to a unit of OKH Holdings. In 2011, a unit of Oxley Holdings paid $343.48 psf ppr for a 60-year-leasehold plot in Irving Place zoned for Business 1-White use with 3.5 plot ratio.

SLP International executive director Nicholas Mak predicts 10 to 16 bids for the site on Tai Seng Street with the highest likely to fall in the $250-300 psf ppr range

The two Tuas South sites launched by JTC yesterday are zoned for Business 2 development, which allows for heavy industrial use. "These smaller plots with shorter tenure are targeted at industrialists who need to custom-build their own facilities," said JTC. "This is also in line with the government's efforts to make industrial property more affordable," it added.

Each plot is being offered on a tenure of 21 years and eight months. Strata subdivision is not allowed in the first five years after the projects receive TOP.

Mr Mak expects more interest in Plot 29 along Tuas South Street 7 as it also has frontage along Tuas South Avenue 7. He reckons the 54,176-sq-ft plot could draw eight to 12 bids with the top bid around $88-94 psf ppr. The other site, Plot 2 on Tuas South Street 6, may fetch seven to 11 bids with the winning bid likely to be around $83-88 psf ppr, he said. It has a land area of 32,686 sq ft.

Colliers' Mr Tan predicts eight to 10 bids for each of the Tuas plots with winning bids likely to be around $70-90 psf ppr.

Tenders close on Nov 22 for the Tai Seng Street site and on Nov 8 for the Tuas plots.