Scotts Road Office Site Draws Strong Interest

Source : The Straits Times, 23 Aug 2007

A SHORT-TERM office site at Scotts Road has attracted keen interest from developers.

With the close of its tender yesterday, 11 bids had come in for the 15-year leasehold site next to Newton MRT Station. The top bid, from Scotts Spazio, was $37 million, or $219.40 per sq ft (psf) of gross floor area. The next highest bid was $31.2 million.

Consultants had predicted that the 1.04ha site would draw top bids of $25 million. Among the bidders yesterday were Sim Lian Land, United Engineers and Soilbuild Group Holdings.

The plot can host a four-storey block with a total floor area of 168,627 sq ft. It was offered by the Government last month as a temporary solution to the current shortage of office space in Singapore.

The Government had said that if the site received a good response, other similar plots could be released.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, attributed the popularity of the site to its shape and size as well as the amenities nearby.

‘Developers seemed undaunted by the short tenure of only 15 years for this parcel,’ he noted. ‘The strong showing and level of bids submitted reflect developers’ general optimism in the light of the current tight supply of offices in prime locations.’

Mr Li said the break-even cost of the site is likely to be about $500 psf per plot ratio, given a 12 per cent yield based on a gross monthly rent of $6.50 psf.