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Thread: On sale now: Two sites, in Jurong and Cecil Street

  1. #1
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    Default On sale now: Two sites, in Jurong and Cecil Street

    http://www.straitstimes.com/premium/...treet-20121220

    On sale now: Two sites, in Jurong and Cecil Street

    Plots can house 25- and 50-storey buildings; meant mostly for office use

    Published on Dec 20, 2012

    By ESTHER TEO PROPERTY REPORTER


    TWO commercial sites - one in Jurong and another in Cecil Street - were put up for sale by the Government yesterday.

    The 1.1ha plot in Venture Avenue in the Jurong Lake District has a gross floor area (GFA) of 65,000 sq m and can be built to 25 storeys.

    At least 90 per cent of the confirmed list site must be for office use while the rest can be for commercial uses such as retail or food and beverage outlets.

    Residential use is not allowed on the 99-year leasehold site, the Urban Redevelopment Authority (URA) said. It added that with the site "predominantly for office use, (this will) reinforce Jurong Gateway as an attractive and vibrant business hub".

    Jurong Lake District, comprising Jurong Gateway and Lakeside, will be the biggest commercial hub outside the city centre.

    Existing developments in the precinct include JTC Summit and the recently revamped entertainment centre JCube; Jem and Westgate, two upcoming retail-cum-office developments, are underway.

    The other site made available for sale yesterday is a 99-year leasehold reserve list plot fronting Cecil Street and Telok Ayer Street.

    The 0.8ha parcel has a potential GFA of 77,000 sq m and is "envisaged to be a high-quality office development" that can help the area develop as a business and finance hub, the URA said.

    It can be developed to up to 50 storeys with about 80 per cent to be set aside for office use. Residential use is also not allowed. Part of the site must be reserved for open space and form part of the green network encompassing parks in Tanjong Pagar, Duxton Plain and Pearl's Hill.

    Experts noted that both sites are coming onto the market at a time when the office segment has slowed.

    Mr Ong Teck Hui, Jones Lang LaSalle Real Estate's national director of research and consultancy, predicts "moderate" participation for the Jurong site. He expects five to seven bidders with a top offer of between $700 and $800 per sq ft (psf) per plot ratio (ppr) - or up to $556 million.

    "The site cannot be benchmarked against the Westgate site, which commanded a top bid of $1,018 psf ppr in May last year, as Westgate's minimum office quantum is only 40 per cent and is predominantly a retail mall," he said.

    Colliers International research and advisory director Chia Siew Chuin said that given the ample supply of office space expected to be completed over the next few years amid a weaker market, it is unlikely that the Cecil Street site will be triggered for sale.

    "Within the central business district, an estimated 7.6 million sq ft GFA of office space is expected to be completed from next year to 2017," Ms Chia added.

    "M+S, the consortium of Khazanah Nasional and Temasek Holdings, in particular, has already committed to developing a total of some 2.9 million sq ft GFA of office space in Marina One and Duo 2 that are envisaged to be ready by the first half of 2017."

    If the Cecil Street site is triggered for sale, there could be three to six bidders with the top bid from $800 to $1,000 psf ppr - or up to $831 million, Mr Ong said.

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  2. #2
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    Default Two commercial sites in Jurong, Cecil St released

    http://www.businesstimes.com.sg/spec...eased-20121220

    Published December 20, 2012

    Two commercial sites in Jurong, Cecil St released

    Jurong East site launched for sale by public tender

    By zeinab yusuf saiwalla


    [SINGAPORE] The government has released the final two commercial sites for the second half 2012 Government Land Sales (GLS) programme.

    One is a confirmed list site near Jurong East MRT Station that has been launched for sale by public tender, while the other is a plot at Cecil Street/Telok Ayer Street that is available for application for sale under the reserve list.

    The Urban Redevelopment Authority (URA) said yesterday that the bulk of the space developed on both sites has to be set aside for office use. In addition, it is allowing strata sub-division of offices for the Jurong plot but not for the Cecil Street site.

    On Venture Avenue in Jurong East, URA's 1.1-hectare confirmed list plot will be the site of the third major office development in the Jurong Gateway location to be released since 2010. This is part of URA's plan to create the biggest commercial hub outside the CBD.

    The latest site can yield a 25-storey project with a maximum gross floor area of 694,939 square feet, of which at least 90 per cent must be for office use.

    Property consultants expect the site to draw five to eight bids. Jones Lang LaSalle, DTZ and CBRE all forecast the winning bid to be $700-$800 per square foot per plot ratio (psf ppr).

    In June 2010, LendLease clinched a nearby white site for $650 psf ppr on which it is now developing Jem. In May 2011, CapitaMalls Asia (CMA), CapitaMalls Trust and CapitaLand teamed up to bag another white site nearby for $1,012 psf ppr, on which it is developing the Westgate project. Both projects are mixed office and retail developments.

    For the Westgate and Jem sites, URA specified minimum office components of 40 per cent and 30 per cent, respectively.

    URA said the latest site will contribute to the development of more affordable office spaces in Jurong to cater to users who do not need a central business district location.

    However, market watchers expect moderate demand for the subject site owing to its less-than-optimum location and high quantum for commercial space.

    Said Lee Lay Keng, associate research director of DTZ: "Even though this site is located in the growth area of Jurong Gateway, it is further away from the Jurong East MRT station compared to the earlier sites (Jem and Westgate) that were sold in 2010 and 2011. In addition, the site will be predominantly for office use, different from Jem and Westgate where there is a substantial retail component."

    Jones Lang LaSalle's national director for research and consultancy, Ong Teck Hui, said that the subject site cannot be benchmarked against CapitaLand's Westgate, which commanded a top bid of $1,012 psf ppr in May 2011. This is because Westgate's minimum office quantum was only 40 per cent and it is predominantly a retail mall.

    A URA spokesman said the planning authority is allowing the flexibility to strata sub-divide for sale the future development on the Venture Avenue site to ensure there is a variety of office space available outside the CBD to meet different business needs.

    "This will provide SMEs the opportunity to purchase their own office space to better manage operating costs," URA said.

    It said that while there is no minimum office unit size control for the Venture Avenue site, the proposed office layout will be evaluated to ensure that it is in line with the typical quality office layout that meets the needs of genuine office end users at the development application stage.

    URA also noted that the two earlier developments in the Jurong Gateway area, Jem and Westgate, will provide office space that will cater mainly to tenants with large space requirements.

    However, URA is not allowing strata sub-division of individual units within the future project at the Cecil Street site.

    Noting that the site is zoned for commercial and open space use, URA said a single owner can better integrate and manage the future commercial building with the public open space fronting the prominent Cecil Street/\Telok Ayer Street junction.

    "As the development is not allowed to be strata-subdivided, there would be less interest from developers who intend to strata-subdivide for sale. However, for office landlords looking to build up their portfolio, this is a well-located and regular-sized site within walking distance to Tanjong Pagar MRT Station. Given that office rents are expected to bottom next year, this site could potentially be triggered by developers keen to add to their portfolio for a steady rental income stream," DTZ's Ms Lee said.

    The 0.8-ha plot, which can generate a 50-storey development with a maximum GFA of 830,510 sq ft, is situated just across the road from SBF Center (formerly known as The Index), which was sold in September 2011 for $882 psf ppr.

    Given that the SBF Center tender attracted three bidders, JLL's Mr Ong expects three to six parties to vie for the subject site, with the top bid of between $800 and $1,000 psf ppr, if the site gets triggered for sale.

    Said Ong Kah Seng, director of R'ST Research: "Notwithstanding the ongoing soft landing for the CBD office property market, this site is expected to be triggered for sale in months to come. It will receive warm developers' interest due to its strategic location. The Robinson's Road/Cecil Street area is indeed very well positioned as a central yet quite affordable location for mid-sized and established businesses which have some budget concerns and which do not favour costlier business locations like Raffles Place and Marina Bay, that typically cater to financially stronger tenants or multinational companies."

    However, Colliers International's director of research & advisory, Chia Siew Chuin, said: "Given the ample supply of office space expected to be completed over the next few years amid the prevailing weaker market and demand conditions, it is unlikely that the site will be triggered from the Reserve List."

    Within the CBD, an estimated 7.6 million sq ft of office space is expected to be completed from 2013 to 2017, she pointed out. M+S Pte Ltd, a consortium of Khazanah Nasional and Temasek Holdings, has committed to developing some 2.9 million sq ft of office space in Marina One (situated in Marina Way/Straits View) and Duo 2 (located in Ophir Road/Rochor Road), which are envisaged to be ready by H1 2017.

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