Two More Transitional Sites Up For Tender

Source : The Business Times, November 27, 2007

Mountbatten and Aljunied sites follow those at Scotts Rd and Tampines

The Urban Redevelopment Authority has launched two transitional office sites at Mountbatten Road and Aljunied Road/Geylang East Avenue 1 for sale by tender.

This follows the recent sale of two transitional office sites at Scotts Road and Tampines for $219 per square foot per plot ratio (psf ppr) and $80.65 psf ppr respectively.

The land parcel at Mountbatten Road has a site area of about 2.12 hectares and can yield a maximum gross floor area (GFA) of 20,000 square metres. It is also next to the future Mountbatten MRT station.

The Aljunied Road/Geylang East Avenue 1 land parcel has a site area of about 1.88 ha and a maximum permissible GFA of 18,885 sq m. The site is adjacent to the Aljunied MRT station. Both sites will be sold on short-term leases of 15 years and are expected to be low-rise developments of about three storeys.

On estimated land prices, Cushman & Wakefield managing director Donald Han said: 'We are likely to see developers taking a defensive play in terms of pricing.'

He added that this strategy was adopted by developers resulting in lower than expected prices for Tampines Concourse transitional site and the Marina View parcel B tender plot.

Given the Mountbatten site's attributes, including a regular shape and the prospect of the future Sports Hub nearby, Mr Han expects bids to fall in the range of $140-150 psf ppr.

The Aljunied site is next to the MRT but the site is elongated and Mr Han believes this could be a constraint in terms of building design.

Noting that the neighbourhood is also relatively mixed, he said that bids for the Aljunied site could come to $120-130 psf ppr.

On likely bidders, CBRE Research executive director Li Hiaw Ho said: 'Given the short tenure and rapidly rising construction costs today, such parcels would appeal to owner occupiers or a tie-up between an investor and an end-user.'

He also pointed out that there could be keen interest in the Aljunied Road/Geylang East Ave 1 parcel due to the existing MRT station and offices in the Paya Lebar micro-market.

Knight Frank director (research and consultancy) Nicholas Mak also highlighted that although the Mountbatten site was closer to the city, the Mountbatten MRT station may only be open between 2010 and 2012.

Adding that there is lack of amenities such as F&B premises, he estimates that the site could attract bids of about $27-28 million while the Aljunied Road site, which is in a relatively more established residential and light industrial area, could attract bids of $30.5-32.5 million.