Record 20 Bids For Jalan Sultan Site

Source : The Business Times, January 23, 2008

$14.8m is top offer for parcel with 17 shophouses

A RECORD 20 bids have been received in the Urban Redevelopment Authority (URA) public tender for a site including 17 two-storey conservation shophouses at Jalan Sultan.

The URA said that this was the highest number of bids it has received for a public tender in at least 10 years.

The 15,200 sq ft Reserve List site was put up for public tender after an unnamed bidder last November committed to place a minimum bid of $7.8 million.

The highest bid received by the URA - $14.8 million - exceeds this by about 90 per cent.

The $14.8 million bid was from Chiu Teng Estates Pte Ltd, which is in the construction, development and property management business. The price works out to $973.63 psf of site area, or about $870,000 per shophouse.

The second highest bid, $13.61 million, was from Brilliant-1 Investments Pte Ltd, followed by KMC Holdings Pte Ltd’s bid of $12.8 million.

Colliers International executive director of investment sales, Ho Eng Joo, said that as the top three bids varied only by about $1 million, it is fair to assume that the prices were ‘fair market value’. Mr Ho had himself earlier estimated the site could fetch a top bid of around $14 million.

Estimating that the potential developer will have to pump in another $500,000 in renovation and restoration costs, the cost for each shophouse unit could rise to $1.3 million.

Based on this, Mr Ho expects that the potential developer will possibly seek a monthly rental of between $5,000 and $7,000 per shophouse unit.

Separately, the URA said that it will not award the tender for a transitional office site at Aljunied Road/Geylang East Avenue 1 because the only bid it received, Mezzo Development’s $7.8 million (or a unit land price of $38.35 per square foot per plot ratio), was too low.

Three transitional office sites have been awarded so far. However, demand for these sites has been on the wane, with some property consultants saying that the sites may no longer be relevant.

URA said: ‘The government is evaluating the market response to the recent tender and the demand for transitional office sites. URA will continue to release more sites if there is demand for such short-term office space.’