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Thread: Mohd Sultan Rd office site up for sale

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    Default Mohd Sultan Rd office site up for sale,00.html?

    Published January 29, 2010


    Mohd Sultan Rd office site up for sale

    New bid is double the one URA received in 2008


    THE Urban Redevelopment Authority (URA) will be launching a transitional office site at Mohamed Sultan Road for sale in around two weeks' time, after a developer committed to pay at least $9.33 million for it.

    The bid, which works out to $94 per square foot per plot ratio (psf ppr), is double that which URA received in 2008 when it last tried to sell the site. This has raised a few eyebrows, considering the soft state of affairs in the office market.

    The 15-year-leasehold office site has a site area of 66,482 sq ft and a maximum permissible gross floor area (GFA) of 99,728 sq ft. It can accommodate a four-storey building.

    DTZ executive director Ong Choon Fah believes that the parcel stood out because of its location, which is not too far from the central business district and is near entertainment spots at Clarke Quay. Companies in the creative industry may find the site attractive, she said.

    Cushman & Wakefield Singapore managing director Donald Han agrees that the site's location is appealing. Given the relatively high offer, he suggests that the bidder could be a firm looking to own and occupy the site, or a developer which 'knows the game, and is confident of developing transitional office sites'.

    He added that the bidder could be expecting a recovery in the office market and as a result, higher rents in future, after the development on the office site is ready around the second half of 2011.

    Leasing activity in the office market has picked up in the last few months as the economy stabilised. 'Although we expect office rents to continue to slide perhaps to the end of this year or early next year, the worst is probably over,' says Mrs Ong. 'There's a lot more confidence.'

    But both consultants do not expect to see many other bidders for the site when the tender is launched. With this bid being so much higher than the previous one, 'there could be some segments saying 'it's not cheap',' Mr Han quipped.

    URA had launched the site for sale in August 2008 when it was on the confirmed list. It received one bid of $4.65 million or $47 psf ppr from RSP Architects Planners & Engineers, but rejected it as it was too low. URA transferred the site to the reserve list in October that year.

    The agency last sold a transitional office site at Scotts Road/Anthony Road in May 2008, for $32.99 million or $226 psf ppr.

    Separately, owners of the freehold residential development Holland Hill Lodge have put their estate up for collective sale. The asking price ranges from $15 million to $16 million, and this translates to a land price of $1,038-$1,107 psf ppr, based on a gross plot ratio of 1.6.

    The site measures some 9,033 sq ft and the existing GFA of the development is 18,086 sq ft. The owners are checking with the authorities on whether this GFA can be fully utilised upon redevelopment.

    Credo Real Estate is marketing the site and the tender closes on Feb 25.

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    Jan 29, 2010

    Developer triggers office site for sale

    By Fiona Chan

    A SHORT-TERM office site on Mohamed Sultan Road that the Government failed to sell two years ago has garnered renewed interest.

    A developer has agreed to put in a bid of $9.33 million for the land - twice the offer that came in for the site in 2008.

    The new bid for the 0.62ha spot has triggered a public tender that will start in two weeks' time, the Urban Redevelopment Authority (URA) said yesterday. It did not identify the developer.

    Located between Kim Yam Road and Martin Road, the site can host a four-storey building with a total floor area of almost 100,000 sq ft. It is being sold with a shorter-than-usual 15-year lease.

    In August 2008, the URA put the site up for sale without waiting for a developer to make an offer. That was to ease a space crunch that was sending office prices soaring. But the financial crisis struck the next month, resulting in only one bid coming in, at $4.65million. The URA rejected the bid as too low.

    Since then, the office market has slumped and is just starting to turn the corner. Prices rose 1 per cent in the final quarter of last year, the first increase in six quarters, according to URA data.

    But property consultants do not see the fresh interest as a sign of brighter days for the market.

    Mr Li Hiaw Ho, executive director of CBRE Research, said there is still more than ample supply of office space over the next few years, so the bidder for this site is more likely to be a company that needs office space rather than a developer anticipating an upturn in the market.

    Separately, a housing site has also been put up for sale by its owners. Holland Hill Lodge, an 11-unit freehold development in Holland Hill, has been launched for collective sale.

    The estate, built in the mid-1990s, sits on a 9,033 sq ft site with an existing gross floor area of 18,086 sq ft, said marketing agent Credo Real Estate yesterday. All the owners have agreed to the sale and are asking for $15 million to $16 million, or $1,038 to $1,107 per sq ft of gross floor area.

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