Temp Office Site In Newton Draws Four Bids

Source : The Straits Times, May 2, 2008

A TENDER for a second temporary office site on Scotts Road and Anthony Road has attracted less interest than the first site adjacent to it.

Temporary sites are being offered for development as offices as part of efforts to ease an office space crunch.

Sun Venture (S) Investments, a development and property asset management company owned by interior design firm DB&B, put in a bid of nearly $33 million.

This price translates to $226 per sq ft (psf) of gross floor area, which is about 7 per cent lower than UOB Kay Hian's recent bid of $242.50 psf for the first transitional plot at the same location.

Nevertheless, these bids remain above the top bid of $219 psf for an earlier transitional site in the area - Scotts Spazio, which is just across Scotts Road - that was released in August last year.

The second plot on Scotts Road and Anthony Road has a size of 97,284 sq ft and, like the first, comes with a 15-year lease. The other bidders were Scotts Development ($219 psf), Centurion Scotts ($171 psf) and Hersing Corporation ($157 psf).

All four also participated in last week's tender for the other transitional plot, which attracted eight bids. Sun Venture was the second highest bidder in that tender, with a bid of $208 psf.

Last week's tender would have weeded out those who could not pay, said Cushman & Wakefield's managing director, Mr Donald Han.

The Government has now offered four transitional office sites, which would yield about 650,000 sq ft of space, said Mr Nicholas Mak, Knight Frank's director of research and consultancy.

Office rents have shot up significantly on tight supply in the past two years, though growth has slowed.

Separately, the Government has made available a commercial site in one-north for application. Developers who are keen have to commit to a minimum bid before the site can be put up for sale.

If triggered, the fairly large plot - it allows for a total gross floor area of 1.29 million sq ft - could attract bids of between $300 psf and $400 psf, said Mr Han.