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Bids for prime Cecil St site tipped to draw a premium

Tender set for 99-year leasehold site after developer's $624m commitment

Published on Jun 01, 2013

By Chia Yan Min


A PRIME financial district commercial site is now up for sale after a developer committed to pay at least $623.73 million.

Once developed, the 0.8 ha site in Cecil Street will be connected to Tanjong Pagar MRT station.

The 99-year leasehold site was made available for sale on the reserve list last December. Such sites go on sale by tender if a developer first commits to a minimum sum acceptable to the Government.

The site includes open space of 17,355 sq ft. The trigger price means a unit price of $750.97 per sq ft per plot ratio (psf ppr), excluding the open space, said Mr Nicholas Mak, head of research at SLP International.

The Urban Redevelopment Authority (URA) said the proposed development of up to 50 storeys will "enjoy excellent frontage and visibility", with the open space forming part of a green network including Tanjong Pagar Park and Pearl's Hill Park.

R'ST Research director Ong Kah Seng said the site is expected to attract about five bids, and could fetch a winning bid of $830 to $980 psf ppr, owing to its strategic location.

The development cannot be subdivided into strata office units for sale, but developers are unlikely to be deterred, said Mr Ong.

Mr Mak noted that developers will be unable to sell off office units individually, and will need to rent out the units instead.

"This restriction could drive away boutique developers that would need the down payments of strata-subdivided units to fund the construction," he said.

Mr Donald Han, special adviser at HSR Property Consultants, said the site is likely out of the reach of most small and mid-sized developers, with the winning bid possibly crossing $1,100 psf ppr.

This would exceed the $1.7 billion - or $1,006 psf ppr - paid by GuocoLand for its nearby site, the 290m skyscraper Tanjong Pagar Centre.

"The market for commercial property has seen an upward reassessment, especially that of strata title offices, and this has created some optimism among commercial office developers," he said.

Mr Han added that the site is "probably one of the last remaining commercial sites within the financial district".

The public tender for the site is expected to be launched in about two weeks, with a tender period of eight weeks, the URA said.

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