Marketing agent Credo Real Estate received several bids and expressions of interest from developers, but the prices offered were all below the reserve.
The site’s four owners wanted at least $27 million for the freehold 27,838 sq ft plot at 6 Jalan Ampas, which now houses four three-storey terrace factory units.
A successful bidder will also have to pay a development charge of about $18.7 million to re-zone and develop the site near Shaw Plaza.
The indicative price range after factoring in the development charge works out to $586 to $625 per sq ft (psf) per plot ratio. This puts a developer’s break-even point at $950 to $1,000 psf, Credo said.
Colliers International’s executive director (investment sales), Mr Ho Eng Joo, said the tender response showed that developers were still very keen to buy land, but only at a level they think is reasonable.
‘Developers are cautiously optimistic,’ he added.
A government tender for a landed site in Jurong West attracted a whopping 32 bidders earlier this week. This is because it is a landed plot – which is low in supply and high in demand – and the site is of a size that is affordable, said Mr Ho.
Government land tenders also come with lower reserve prices and typically have fewer conditions than a private land site.
At the height of the 2007 boom, the highest number of offers Credo received for a land tender was 10, said its deputy managing director Tan Hong Boon.
The property firm will negotiate with the interested parties to nail down a price.
Source : Straits Times – 11 Dec 2009
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