Published July 24, 2007

Mapletree is Anson Rd site top bidder


MAPLETREE Investments has emerged as top bidder for an office site at Anson Road/Enggor Street in a public tender that also drew other big developers such as CapitaLand and Keppel Land.

At $391.9 million, Mapletree's bid works out to be $1,021 per sq ft per plot ratio for the 39,732 sq ft site, which has a maximum gross floor area of 383,808 sq ft.

Five bids came in, with Mapletree's offer topping second-placed NTUC Income Insurance Cooperative's bid by 23 per cent.

The fifth bid was from a company associated with UOL.

The site, which will likely go to the highest bidder, will be formally awarded soon, making it Mapletree's first major land acquisition in years.

On its likely win, Mapletree CEO Tan Boon Leong said: 'Indication of interest from corporate users has been positive and we expect the building on this site to be substantially pre-leased before completion.'

Mr Tan believes the building can be completed quite quickly, ahead of office space being available in 2010.

At the allowed gross plot ratio, the optimal building will be 18-storeys high with floor plates of 22,000 sq ft.

Even though Mapletree's bid was 23 per cent higher than the next bid, Savills Singapore director for marketing and business development Ku Swee Yong said: 'The developer got the site at a good price. Even if rents remain at current levels for that location, the yield could be 5-7 per cent per annum.'

Li Hiaw Ho, executive director at CBRE Research, said that at end-June, the office occupancy level in the Tanjong Pagar area was 95.5 per cent, up from 92.7 per cent in Q107 and 91.8 per cent in Q406.

Mr Li reckons Mapletree's development costs could be around $2,000 to $2,100 psf.

'At a stabilised yield of 4 per cent to 4.5 per cent, office rents of about $9.00-$10.00 psf per month can be expected,' he said.

What interests some analysts is that the top two bidders are 'non-traditional' CBD office developers.

DBS Vickers Research analyst Wallace Chu said Mapletree could be looking to 'leverage the expertise it gained at HarbourFront'.

But he is flummoxed by NTUC Income Insurance Cooperative's bid and wonders if it hints at a new direction for the co-op.