http://www.businesstimes.com.sg/spec...f-ppr-20131011

Published October 11, 2013

2 Tuas sites draw top bids of $88.14, $98.11 psf ppr

Separately, local engineering firm is selling its premises at Gul Circle

By Kalpana Rashiwala [email protected]


TWO short-lease sites in Tuas South have received top bids of $88.14 per square foot per plot ratio and $98.11 psf ppr.

The higher unit land price was offered for a plot with dual frontage on Tuas Street 7 and Tuas South Avenue 7. The top bid by Reclaims Enterprise Pte Ltd works out to $5.33 million. The 54,329.71 sq ft land parcel, dubbed Plot 28 on Tuas South Street 7, drew five bids. The lowest offer, from Soilbuild Group Holdings, was $40.49 psf ppr.

The other plot, Tuas South Street 6 (Plot 4), attracted 10 bids. The highest - $2.88 million or $88.14 psf ppr - was from Derman Aluminium (S) Pte Ltd. HP Construction & Engineering Pte Ltd was the lowest bidder, at $46.44 psf ppr, for the 32,686.74 sq ft plot.

Each land parcel has tenure of 21 years and nine months, and was put up for tender by JTC Corporation under the confirmed list of the Industrial Government Land Sales Programme.

Strata subdivision is not allowed in the first five years after the projects receive Temporary Occupation Permit. Both sites are zoned for Business 2 development, which allows for heavy industrial use. They have a 1.0 plot ratio (ratio of maximum gross floor area to land area).

Meanwhile, a local engineering company is selling its premises at 158 Gul Circle comprising a two-storey building with office and production space; three adjoining single-storey factories; and a large open yard space - with a total gross floor area (GFA) of 61,827 sq ft on land of 120,062 sq ft. The site has balance lease tenure of about 17.5 years and is zoned for Business 2 use with 1.4 plot ratio. This means that additional GFA of 106,259 sq ft can be built.

The property is being offered for sale with vacant possession. The seller plans to move to smaller leased premises.

"Properties with multiple single-storey factories and a huge open yard are rarely available for sale and we believe that it will be well received by Business 2 end-users, which are typically involved in heavy industries," says Nicholas Ng, local director of investments at Jones Lang LaSalle. "The site is currently under-built and has the potential to be redeveloped to maximise its plot ratio."

The company is marketing the property through an expression of interest exercise that closes on Nov 21. The pricing expectation is about $16.5 million.

Meanwhile, Catalist-listed food catering company Neo Group is on an expansion trail. It is buying a row of five terrace factories at the corner of Jalan Boon Lay and Enterprise Road for $12 million.

The factories - Nos 1, 3, 5, 7 and 9 Enterprise Road - are on sites with balance lease terms of 22 to 29 years and their sale is subject to approval by JTC Corporation. The properties are being sold by International Flavors & Fragrances (IFF), which had previously used them as its factory. IFF last year opened a new plant along Chin Bee Drive in Jurong.

Located within JTC Corp's Chin Bee Food Zone, the properties have a combined land area of 75,018 sq ft and are zoned for Business 2 use under Urban Redevelopment Authority's Master Plan 2008. The five factories have an existing GFA of 57,112 sq ft, just slightly over a third of the maximum allowable 159,591 sq ft. This means there is substantial redevelopment potential for Neo Group.

"The food manufacturing industry in Singapore is doing very well. All the 20 prospective buyers I dealt with in the course of marketing this property are looking for space to expand," says Darren Wang, associate director of capital markets at Cushman & Wakefield, who brokered the sale through a private treaty deal.

Neo Group will not be redeveloping the site in the near term. Instead it will embark on addition and alteration works with a view to making the premises operational within a few months for food preparation and manufacturing.

Set up in 1992 by Neo Kah Kiat, the group also operates a chain of Japanese convenience food retail outlets under the "Umisushi" brand and supplies food ingredients and Japanese food products to third parties in addition to its food catering business.