Just One Bid For Mohamed Sultan Road Office Site

Source : The Straits Times, Oct 15, 2008

A TENDER for a transitional office site - aimed at easing the office squeeze in Singapore - in Mohamed Sultan Road has closed with just one bidder, and at a far lower-than-expected offer of $4.65 million.

The price for the 6,176 sq m plot, which has a 15-year lease, works out to $46.67 per sq ft of gross floor area. It came from local firm RSP Architects Planners & Engineers.

'The bid is only one-fifth of the average land prices of the two Scotts Road sites which were awarded in April and May this year,' said Knight Frank's director of research and consultancy Nicholas Mak.

'It is very conservative so there is a good likelihood that it may not be awarded.'

When the site was launched for tender in mid-August, Mr Mak had expected the bids to come in at between $10 million and $13 million. Another consultant had expected even higher bids of up to $18 million.

However, consultants generally agree that interest in such office sites will be subdued, given the poor market sentiment and the large supply of office space expected in 2010.

A building on the Mohamed Sultan site could be built in around a year, which is near the time when more office supply from buildings such as Marina Bay Financial Centre will pour into the market.

The Urban Redevelopment Authority will announce its decision at a later date, after it has evaluated the bid.

Earlier this year, the URA rejected the only bid - at $7.8 million or $38.35 per sq ft of gross floor area - submitted for a transitional office site in Aljunied Road because it was too low.

This Mohamed Sultan site is one of three commercial plots slated for sale through the confirmed list in the second half of the year. Confirmed list sites go up for tender on scheduled dates, regardless of developer interest.

The tender for a second transitional office site on the list, in Mountbatten Road, was launched last month and will close on Nov 18.