Woodlands industrial site draws just 4 bids; Tuas parcel for sale

[reporter2]

http://www.straitstimes.com/archive/...-sale-20140827

Woodlands industrial site draws just 4 bids; Tuas parcel for sale

Published on Aug 27, 2014 1:42 AM


AS THE tender for a large light industrial site in Woodlands closed yesterday after slack bidding, a few small sites in Tuas suitable for heavy industrial use are in the pipeline.

Only four offers came in for the 1.57ha land parcel at Gambas Crescent (Parcel 4) near Sembawang MRT station. All were lower than expected. The highest, lodged by NSS Realty, was $83 per sq ft (psf) per plot ratio (ppr), below analysts' predictions of $90 to $120 psf ppr.

R'ST Research director Ong Kah Seng said that since Far East Organization already owns the three parcels next to the plot, it is likely that developers saw there was "little mileage in acquiring the fourth parcel at high land costs".

Even Far East saw fit to offer only $66 psf ppr through its unit Grow-Tech Properties, making it the second-highest bidder. Its bid was about 20 per cent lower than the top offer. It had paid $134 psf ppr for Gambas Crescent Parcel 1, $127 psf ppr for Parcel 2 and $102 psf ppr for Parcel 3.

Mr Ong said NSS Realty may have put in a higher bid because it wanted to secure one of the last light industrial sites to be launched in state tenders this year.

All the industrial sites slated to go on sale in the second half of this year are zoned for heavy industrial use, he noted.

JTC Corporation yesterday launched one of them for sale. The 0.8ha site at Tuas South Street 9 has a tenure of 20 years and nine months and is zoned for "Business 2" (B2) development, which indicates it is suitable for heavy industries. Analysts expect it to fetch five to 10 bids, with a top offer of $60 to $75 psf ppr. The tender closes on Oct 21.

Another industrial B2 site, at Tuas South Street 11, has been triggered for sale from the industrial government land sales programme's reserve list, JTC said, as one developer has committed to bid at least $6 million for the 0.9ha plot, which has a leasehold of 20 years and 10 months. This works out to $62 psf ppr.

Analysts said this site could attract seven bids, and the top offer could come in at $60 to $75 psf ppr. A site on the reserve list goes on sale only if a developer lodges a minimum acceptable bid.

The parcel will be launched for sale by public tender in the middle of next month, JTC said.

It added it has put a nearby 0.8ha industrial B2 site at Tuas South Street 11 on the reserve list for the second half of this year. That site has a lease term of 20 years and four months.

SLP International research head Nicholas Mak said all three sites would likely attract bids from end-users due to their small size.

MELISSA TAN

[reporter2]

http://www.businesstimes.com.sg/arch...nders-20140827

Published August 27, 2014

Sharp fall in industrial land bids at 2 state tenders

Tuas South parcel's S$56 psf ppr top bid is half that for nearby plot year ago

By Kalpana Rashiwala

[email protected] @KalpanaBT


STATE tender closings on Tuesday for two 30-year leasehold industrial sites in Gambas Crescent and Tuas South reflect sharp drops in industrial land prices as developers factored in an impending market correction given the huge supply of industrial space scheduled for completion in the next three years.

The top bid for a plot at Gambas Crescent in the Sembawang location was almost 19 per cent lower in unit land price terms than that for the adjacent site sold last December, while a site in Tuas South fetched just half the price that an earlier site in the locale went for a year ago. Both sites are from the first-half 2014 Industrial Government Land Sales (GLS) list

Gambas Crescent Parcel 4 fetched a top bid of S$83.03 per square foot per plot ratio (psf ppr) - compared with S$102.20 psf ppr last December for the adjacent Parcel 3. The neighbouring Parcels 1 and 2 sold at even higher prices in October last year - about S$138 psf ppr and S$127 psf ppr respectively.

All the four Gambas Crescent parcels are for Business 1 (B1) use and have 2.5 plot ratio (ratio of maximum gross floor area to land area).

The top bidder at Tuesday's tender for Parcel 4 was NSS Realty - whose ultimate shareholders include Ng Teng Yeng, brother of the late Ng Teng Fong, who founded Far East Organization group.

Interestingly, Far East, bidding through Grow-Tech Properties, emerged as the second highest bidder, at S$65.89 psf ppr for the nearly 1.57-hectare site. This is considerably lower than its winning bids for Parcels 1-3.

"Far East can already easily set selling prices in the vicinity with the three projects on Parcels 1-3, so there's little mileage in acquiring the fourth parcel at high land cost," said R'ST Research director Ong Kah Seng.

Last month, Far East soft launched the project on Parcel 1 - Nordcom One - comprising 130 factory units. The property giant is understood to have sold 44 of the 55 released units at an average price of S$325 psf. The 10-storey project comprises ramp-up factories, flatted factories and three-storey factories.

Sales, however, are said to be slower at another Far East industrial development, The Index in Tuas South Avenue 3, launched in Q1 this year. The project has 98 strata factory units. So far, the group is said to have sold only 22 units - all of them in the smaller-unit category (Type C) - at an average price of S$366 psf. Far East paid nearly S$112 psf ppr for the 30-year, Business 2 (B2) site that has 1.4 plot ratio, at a tender that closed in August last year.

Industry observers say the slow sales at The Index was probably a key factor that influenced bidders at JTC Corp's tender on Tuesday for the 2.57-ha site off Tuas South Avenue 7. Dubbed Plot 12, the 30-year, B2 plot with 2.0 plot ratio drew a top bid from mainboard-listed Hock Lian Seng Holdings of S$56 psf ppr - half the price for the Index site a year ago. The company is involved in civil engineering, property development and investment.

R'ST Research's Mr Ong suggests another reason for the weaker psf ppr top bid for Plot 12 off Tuas South Avenue 7 compared with Gambas Crescent Parcel 4 could be that the latter is zoned for B1 use, which is typically more appealing to investors. The Gambas plot is the last remaining B1 plot on the Industrial GLS slate.

All sites in the current H2 2014 Programme are for B2 use, catering to heavier industrial production that requires a bigger buffer for pollutive use, said Mr Ong.

"Occupiers of B2 premises are generally conventional, bona fide industrialists, whereas B1 use tends to attract both investors and tenants who require cleaner, higher-order industrial facilities usually in the form of modern strata factories," said Mr Ong.