http://www.straitstimes.com/archive/...ussle-20140910

Industrial site draws top bid of $5.2m in eight-way tussle

Published on Sep 10, 2014 1:12 AM

By Cheryl Ong


A TUSSLE between eight bidders for an industrial site in Tuas South Street 7 resulted in a top offer of $5.2 million yesterday.

The bidders, mostly construction and engineering firms, were likely drawn to the site by its affordability, analysts said.

IG Tuas lodged the top bid - $96 per sq ft (psf) per plot ratio (ppr) for the 554,235 sq ft parcel. It is the last site on the industrial Government Land Sales (GLS) list for the first half of the year.

This was 9 per cent more than New Hope Singapore's bid of $4.79 million - or $88 psf ppr - which came in second.

L&P Blasting was third with its bid of $4.1 million - or $76 psf ppr - 26 per cent lower than the top offer.

Analysts had expected a winning offer of $68 to $100 psf ppr when the site was put up for sale in July. However, SLP International research head Nicholas Mak noted that similar parcels nearby were being sold for lower prices of $65 to $70 psf ppr.

The site is zoned B2, typically for heavy industrial use, and was triggered for sale from the reserve list when a minimum bid price of $3.52 million was submitted. It has a lease of 20 years and 10 months and a plot ratio of 1.

A site on the reserve list is launched for tender only upon successful application by a developer, while confirmed list sites are launched according to schedule, regardless of demand.

"The relatively healthy participation in (the) tender is partly due to the limited supply of such small sites in the current industrial Government Land Sales programme," said Mr Mak.

Only one B2 industrial site available for the second half of the industrial GLS programme is smaller than 0.6ha, and is likely to fetch a price lower than $5 million - a sum that is deemed more palatable to many small and medium-sized industrial firms.

Mr Mak expects the new development to be a single factory as strata-subdivision is not allowed for the plot, until five years after the building is completed.

[email protected]