A JURONG West industrial site with a 30-year lease has succeeded in attracting eight bids.
At $19.4 million, or $48 per sq ft per plot ratio, the top bid from Kng Realty is nearly 8 per cent more than the second-highest bid of $18 million.
It is also more than twice the trigger bid of $8.2 million, to which an unnamed party had committed and which activated the sale of the site.
CBRE Research executive director Li Hiaw Ho said the bids were ‘encouraging’.
He said: ‘The healthy response to the tender reflects the more optimistic business sentiment.’
He pointed out that Kng’s offer price was significantly higher than the $37 psf per plot ratio that Soilbuild Group Holdings paid for a 30-year leasehold industrial site along Pioneer Road/Tuas Avenue 11 in November 2007.
The latest site is located at Pioneer Road North and Soon Lee Drive and is better situated, given its proximity to Pioneer MRT station.
Colliers International director (industrial) Tan Boon Leong said the bids were within expectations and showed that developers were optimistic about the future.
He estimated that the break-even cost of the development would be around $150 psf and that the eventual selling price would likely be $170 psf to $200 psf.
CBRE put a higher estimate on the break-even cost for the development – of between $190 psf and $210 psf.
Relatively new industrial player Kng had clinched another 30-year leasehold industrial site along Kaki Bukit Road 2 in August.
Source : Straits Times – 10 Dec 2009
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