Soilbuild top bidder for Yishun site

Published October 19, 2010
By KALPANA RASHIWALA


SOILBUILD Group Holdings has emerged as the top bidder for a 60-year industrial plot at Yishun St 23/Ave 9.

The plot, zoned for Business 2 use, received four bids at a state tender which closed yesterday.

Soilbuild's top bid of slightly over $64.01 million works out to $51.10 per square foot per plot ratio (psf ppr).

This is lower than bids of about $71 psf ppr and $76 psf ppr fetched for two smaller neighbouring plots (zoned Business 1) which were awarded to OKH Management and Soilbuild itself respectively at separate state tenders which closed in April this year.

Colliers International director (industrial services) Tan Boon Leong nonetheless considered the top bid at yesterday's tender as a competitive one, pointing out that it was for a site which is three times as large as the two earlier plots.

A larger site would typically entail a bigger lump sum investment and investors would usually tend to offer a lower unit land price in terms of psf ppr, all other factors being equal, he added.

As well, the latest plot has a much shorter project completion period of 36 months, compared with 96 months for the earlier sites.

This gives the successful bidder less scope to delay its project commencement with an eye to ride any upcycle in the industrial property market, Mr Tan added.

The latest plot is designated for development into a ramp-up factory with direct vehicular access to all units; in addition, the developer is required to build a minimum number of fairly large-sized units, which would clip its ability to maximise selling prices for the end units.

'And there's another limitation as with effect from July 1, 2010, saleable carpark lots have been included in the gross floor area computation for industrial developments - which limits the amount of strata industrial space left for sale in a development,' Mr Tan said.

Soilbuild's top bid at yesterday's tender was 12.3 per cent higher than the next highest offer by Ho Lee Properties ($57 million or $45.50 psf ppr).

Winteng Development and KNG Land also took part in the tender, bidding $55.38 million and $47.62 million respectively.

Source: http://www.businesstimes.com.sg