http://www.businesstimes.com.sg/arch...-site-20131123

Published November 23, 2013

Mapletree tops bids for Tai Seng site

By ong chor hao [email protected]


A UNIT of Mapletree Investments has put in the highest offer out of seven bidders for a plum 11.8-hectare industrial site next to Tai Seng MRT station.

Mapletree Trustee placed a bid of $120.1 million, or $270.57 per square foot per plot ratio (psf ppr), for the 30-year leasehold plot at Tai Seng Street in the tender that closed yesterday.

This was 13.5 per cent higher than the next highest bid of $105.8 million, or $238.35 psf ppr, from Ace-Industrial, linked to Far East Organization.

The top offer was in line with earlier predictions from analysts, who expected anywhere from six to 16 bidders and a highest offer of between $250 psf ppr and $300 psf ppr.

Nicholas Mak, executive director for research and consultancy at SLP International, said yesterday that at least three of the bidders had links to real estate investment trusts or property trusts. Besides Mapletree, the likes of Soilbuild Group and HSBC Institutional Trust Services (Singapore) also took part.

He cited several reasons for the interest from these trusts. One is the potential to generate rental income.

"The site has a 10-year restriction against sub-dividing the development into strata-units for sale, which means that the owner needs to own it for at least 10 years for lease," said Mr Mak.

That the site will be directly linked to Tai Seng MRT station and its zoning as a Business 2-White site, which JTC Corporation said allows for a mixed-use project offering retail, F&B and office spaces, were also pull factors.

"It is quite rare for the government to offer 'industrial-white' sites for sale," Mr Mak said, adding that the previous such offering had been in October 2011 for a site zoned "Business 1-White" at Lavender Street.

The Tai Seng Street plot, which JTC said will form "the epicentre of Paya Lebar iPark", has a maximum permissible gross plot ratio of 3.5. This works out to a maximum gross floor area (GFA) of around 443,800 square feet at the future development.

Of this, some 28.6 per cent has been set aside for "white" use. JTC has stipulated that a portion of this white space be for retail use such as cafes and food courts to support the working community at Paya Lebar iPark.

The rest of the GFA will be for Business-2 development, which allows for heavy industrial use.

The Tai Seng plot is sold with a 7,920 sq ft strip to provide vehicular access for pick-up and drop-off, and 2,336 sq ft of underground space to be developed into a pedestrian link to the MRT station.

The lowest bid for the tender for the site came from Eco-I, which bid $28.8 million, or $64.89 psf ppr.