http://www.businesstimes.com.sg/sub/...72740,00.html?
Published June 22, 2011
CBD building up for sale, 2 URA tenders launched
Tenders are for plots for condos in Potong Pasir, landed housing in Serangoon Gdns
By NICHOLAS YEO
AT least three opportunities for those seeking property investments here were rolled out yesterday.
Within the central business district (CBD), SEB Investment put up 77 Robinson Road, a 35-storey commercial building, for sale. And the Urban Redevelopment Authority (URA) launched tenders for two 99-year leasehold private residential sites: a condo plot next to Potong Pasir MRT Station, and a plum landed housing plot at Serangoon Garden Way.
SEB Investment has appointed Colliers International to conduct an expression of interest to sell 77 Robinson Road through an exercise which will close on Aug 3. The office tower is on a 32,435 square foot site with a remaining lease of 82 years. Colliers noted that the most recent office tower transaction in Singapore's CBD was that of Capital Square for $2,300 per square foot of net lettable area. Assuming 77 Robinson Road, which has a net lettable area of 294,895 sq ft, fetches the same price, the deal would amount to $678 million.
The building is currently 92 per cent leased to MNC tenants such as Adidas, Dentsu and Rabobank Group. Under Master Plan 2008, the site is zoned for commercial use with a plot ratio of 11.2+.
'With Grade A office rents currently 45.7 per cent below the previous peak in Q1 2008, it is predicted that rents for the whole of 2011 will continue to enjoy an expansionary mode, supporting a 15-20 per cent growth,' said Tang Wei Ling, executive director for investment services at Colliers International.
Credo Real Estate executive director Ong Teck Hui expects the condo plot at Pheng Geck Avenue next to Potong Pasir MRT Station to fetch top bids in the range of $500-600 psf per plot ratio (ppr) with about 5-8 bidders participating. URA data on developers' monthly sales shows that 16 units at Nin Residence next door were transacted last month at a median price of $1,152 psf. Qingdao Construction clinched the Nin Residence plot in June 2010 for $607 psf ppr.
URA has designated the latest site for development into condominiums, flats or serviced apartments. The land parcel can potentially yield 330 housing units.
Said Mr Ong: 'Bidders for the site are likely to be more cautious in view of the growing supply from earlier Government Land Sales (GLS) tenders and possible impacts arising from the HDB market, such as the income ceiling revision and increased supply of Build-to-Order (BTO) flats.'
Further north is the landed housing parcel at Serangoon Garden Way, with an area of 305,711 sq ft. URA has stipulated that strata landed housing will not be allowed for this plot, which can yield about 80 homes of up to two storeys. The developer is expected to master develop the site, in compliance with development control guidelines.
SLP International executive director (research and consultancy) Nicholas Mak expects the winning bid to be about $480-520 psf of land area in today's market. The tender could attract 6-12 bidders, he said.
Mr Mak noted that, recently, the average transacted prices for semi-detached and terrace houses in Serangoon Garden Estate in H1 2011 were about $1,001 and $1,028 psf of land area respectively.
Credo's Mr Ong said: 'The main attraction is its location, which is popular with landed property buyers.' He added, however, that 'the site has its drawbacks - being just next to the Central Expressway and limited to a building height of two storeys'.
He believes these factors will affect unit selling prices and tender bids. 'Nevertheless as the market has been 'starved' of landed housing sites, and with this location, we're likely to see fair interest in this site,' he said. 'The total land price could be above $100 million or $320 psf of gross site area. We can expect 6-10 bidders.'