UOB Kay Hian offers highest bid for site at Scotts Road

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UOB Kay Hian offers highest bid for site at Scotts Road

By Channel NewsAsia | Posted: 24 April 2008 2208 hrs


SINGAPORE: The tender for the transitional office site at Scotts Road/Anthony Road has attracted strong bids.

There were a total of eight bids at the close of the tender on Thursday.

UOB Kay Hian put in the highest offer at S$34 milllon, 16 per cent higher than the second bid. The bid works out to more than S$242 per square foot per plot ratio.

The almost 8,700-square-metre site is offered on a short-term lease of 15 years.

Property consultant Knight Frank offered a few reasons for the strong bids. It noted that the site is near to an MRT station and is located just outside the central business district.

In addition, office supply continues to be tight, and the site has potential for amalgamation with an adjacent land parcel. - CNA/ac

http://www.businesstimes.com.sg/sub/...76498,00.html?

Published April 25, 2008

UOB Kay Hian wins office site with $242.5 psf bid

By SIOW LI SEN


UOB Kay Hian Trading has landed the Scotts Road/ Anthony Road 15-year lease site with a surprising record bid of $242.5 per square foot (psf), double original estimates in a strongly contested tender.

The stockbroker beat seven other bidders for the transitional office site by offering $34 million for parcel A at Scotts Road/ Anthony Road with an area of 8,682.8 square metres (93,461 square feet). It is offered on a short-term lease of 15 years.

The tender surprised consultants who had expected bids to come in between $100 and $130 psf.

UOB Kay Hian's $242.5 psf bid was 16.5 per cent higher than the second bid from Sun Venture (S) Investments.

It is also 11 per cent more than what had been paid for the first transitional office site in Newton in August 2007.

This was awarded to Hwa Hong Corporation and KOP Capital for $37 million, or $219 psf.

The Urban Redevelopment Authority (URA) yesterday released the results of the latest transitional office tender, its fifth. The previous tender for a site in Aljunied Road closed with only one bidder and was withdrawn as the reserve price was not met.

But consultants said that the results of the latest tender does not necessarily signal a turnaround of the moribund property sector. They noted the prestigious location of the site and that it is a hop and skip away from the Newton MRT.

'I think it's too early to pop the champagne yet,' said Nicholas Mak, director of consultancy & research department, Knight Frank.

'As the site is located next to Newton MRT station and proximate to the Central Business District, companies leasing the space here can reduce their occupancy costs significantly yet still have their office located in a strategic location,' said Mr Mak.

Specifically, continued tight office supply and strong demand have sustained the growth in rentals for Q1 2008 in which average grade A office rentals in Raffles Place reached $17.63 psf per month. This rental level is much higher compared with the current monthly gross rent of $6-8 psf in the Scotts Road area.

UOB Kay Hian, consultants speculated, will move its back room offices to the Newton office when it is ready and free up the expensive space it currently occupies in Raffles Place.

Ku Swee Yong, Savills' director of business development and marketing, estimated that after factoring construction and the land costs, UOB Kay Hian will still make a nice profit on the Newton site based on monthly rental of $7 psf.

'Given this bid, the economics makes total sense,' he said.

http://www.businesstimes.com.sg/sub/...76647,00.html?

Published April 26, 2008

UOB-Kay Hian to build site for own use

By VEN SREENIVASAN


INVESTMENT house UOB- Kay Hian will develop the Scotts Road/Anthony Road site which it clinched this week for its own use, a senior company official told BT yesterday.

'It will be our new office when fully developed,' said Esmond Choo, the company's executive director. 'It will give us some 140,000 square feet of office space, which should be sufficient to house our 2,500 staff. The location is a nice, upmarket area, near the MRT station and next to the prime shopping and hotel areas.'

UOB-Kay Hian beat out seven other bidders with its record $34 million tender for the 15-year-lease site this week. This works out to $242.5 per sq ft for the 93,461 sq ft plot - double original estimates by property market insiders.

UOB-Kay Hian's bid was also some 11 per cent more than what had been paid for the first transition office site in Newton in August 2007.

Asked why UOB-Kay Hian paid record prices for a 15-year-lease property, Mr Choo said: 'We see the office rental market continuing to tighten up and rentals trending up in the foreseeable future. So we decided to take ourselves out of the equation. This way, we will not face major disruptions and it will give us more predictability in terms of our operating costs.'

Rentals in the prime Raffles Place area, where UOB-Kay Hian has its 100,000 sq ft office, averaged over $15-18 psf amid continuing tightening in the office space supply market through the first quarter. This is much higher than the $6-8 psf monthly gross rent commanded in the Scotts Road area.

UOB-Kay Hian itself is said to be paying around $10 psf despite operating out of its parent UOB's premises. But Mr Choo added that UOB-Kay Hian would keep its outlay on the new property within reasonable limits, bearing in mind that it would be a transitional office with a relatively short lease.

'We expect to spend about $200 psf to develop it into a nice low-rise office headquarters housing our entire operations,' he said. 'It will be a nice, comfortable, efficient and attractive glass-and-concrete building.'

Mr Choo did not say what the company would do after the 15-year lease is up.