Robust bidding for Tuas industrial plots
Offers within expectations, reflect interest from users and developers.
By: Ong Chor Hao
DEMAND for industrial property remains robust, going by the bidding activity for three plots of land in the Tuas area that closed on Wednesday, even though the offers were largely within market expectations.
JTC Corporation launched a plot of land at Buroh Street and two others at Tuas South Street 6 under the Industrial Government Land Sales programme in November last year.
Said Ong Kah Seng, director at R'ST Research: "The responses for each site are generally very positive, reflecting keen interest from both developers and end-users."
The 2.74-hectare Buroh Street site (the equivalent of about four to five football fields) has a 30-year tenure and drew a total of seven bids, JTC data showed.
The top bid of $82.1 million, or about $111.35 per square foot per plot ratio (psf ppr), came from Capital Development and ZACD Investments.
This narrowly pipped the $81.9 million or $111.05 psf ppr offer from Soon Hock Investment Group.
The award of tenders does not have to go to the highest bidder, and will be announced at a later date by JTC.
Analysts BT spoke to when the tender was launched had expected around five to nine bids of between $40 to $105 psf ppr.
Tan Boon Leong, executive director of industrial services at Colliers International, said that while demand came mainly from developers, he expected them to cater to end-users' needs.
"Developers are coming in and I'm sure that they will do their due diligence and know that the 30-year lease with a short tenure and with a (Business 2 zoning), is more for the end-users rather than investors."
With land zoned as Business 2 meant for heavier industrial use, and with the lease shorter than before, industrialists will be very particular that their premises meet their work requirements, he noted. End-users are further aided by technical conditions introduced by the government last year to ensure that their needs are met.
The two plots at Tuas South Street 6, known as plot 30 and plot 32, drew 14 and 18 bids, respectively. Both are 0.86-ha sites with a lease of 22.5 years. Earlier predictions had ranged from five to 13 bids for the two sites.
The highest bid for plot 30 came from Koh Brothers Building & Civil Engineering Contractor, at $6.6 million or $70.99 psf ppr.
This was slightly above the second-highest bid from Yee Lee Development of $70.97 psf ppr.
For plot 32, the top bid came from contractor SH Design & Build at $6.7 million, or $70.75 psf ppr.
Again, bidding was competitive, with the second-highest bid of $70.63 psf ppr coming from Tiong Seng Contractors.
Colliers' Mr Tan said this reflected "pent-up demand" from end-users and urged the JTC to introduce more of these smaller plots of land for end-users.
"Developers have been on the bay for Tuas plots ... due to the short 20-odd years tenure which make the site hard to be resold as likely its value will depreciate with diminishing tenure," said R'ST's Mr Ong.
But he urged caution in case prices rise to such an extent that end-users are priced out of a purchase.
Recommended For You
The Straits Times - 26 Mar 2014
HUNDREDS of tenants in 26 blocks at Eunos Industrial Estate will be relocated to Ang Mo Kio as the Housing Board plans for the redevelopment of the estate.
The Straits Times - 22 Mar 2014
INDUSTRIAL landlord Mapletree Industrial Trust has inked a $250 million deal to develop a new facility for American computer vendor Hewlett-Packard Singapore (HP).
The Straits Times - 18 Mar 2014
TWO adjacent multi-storey warehouses in Tampines are up for sale with an indicative price of $70 million in total.
Hottest Articles In The Past Week
The Straits Times - 12 Apr 2014
ANYONE trying to sell a private home in the first quarter would not need reminding that an air of gloom has settled over the market.
The Straits Times - 14 Apr 2014
HOME buyers have found it harder to obtain loans in the wake of tighter mortgage rules imposed last year.
The Business Times - 11 Apr 2014
ALLGREEN Properties is launching its freehold condominium project, The Sorrento (the former Regent Gardens), at West Coast Road during the Easter weekend of April 19 at an indicative pricing of between $1,380 and $1,600 per square foot.
Latest Industrial Ads
Team LOYANG EN
- exclusive whole
floor - ceiling height
**Ground floor** -
ceiling height up to
8m - 40 f
4.8 Percent Guaranteed Yield Terrace Factory Light Industrial B1 Industrial 31 Bukit Batok Crescent For Sale
Light Industrial (B1)
for sale with tenancy
Guides & Articles