60-year leasehold is near Admiralty MRT Station
THE Urban Redevelopment Authority has made a 60-year leasehold industrial site at Woodlands Avenue 12 available for application through the government’s reserve list.
It will be released for tender once a bidder undertakes to pay a minimum acceptable price.
The 347,451 sq ft site is closer to Admiralty MRT Station than two earlier industrial sites at Woodlands Industrial Park E5, sold by the state this year and last year.
As a result, Colliers International director (industrial) Tan Boon Leong reckons the latest site could fetch top bids of $50-$55 per sq ft of potential gross floor area if it was on the market today. This is significantly higher than the $34 psf per plot ratio (psf ppr) that Wee Hur Development paid for a plot on the corner of Woodlands Industrial Park E5 and Woodlands Avenue 4 in a state tender that closed in July this year. In July last year, Soilbuild Group clinched the plot next door for about $30 psf ppr.
All three plots have 60-year leasehold tenure and a 2.5 gross plot ratio – the ratio of maximum potential gross floor area to land area).
However, the latest plot at Woodlands Ave 12 is much larger than the two earlier plots, which means developers will need deeper pockets to bid for it, says Mr Tan.
With a maximum permissible gross floor area of 868,628 sq ft, the land bids of $50-$55 psf ppr predicted by Mr Tan reflect absolute bids of about $43-$48 million. ‘It could be developed into a flatted and ramp-up factory/ware-house project,’ he said.
Based on his estimated land price of $50-$55 psf ppr, the breakeven cost would work out to about $170 psf of net saleable area. Mr Tan reckons the flatted factories could sell for at least $200 psf on average, pointing out that Soilbuild sold flatted factories on its Woodlands site this year at $160 to $190 psf.
However, a seasoned industrial property developer put a much lower land price on the latest site – $30-$40 psf ppr, which is close to the earlier two sites to ensure end-selling prices are kept within reach of SMEs. ‘For flatted factories, the affordable price range for SMEs would be $150-$180 psf,’ he said.
The latest site is zoned Business 1, which means light and clean industry and warehouse are allowed. The two plots sold earlier are zoned Business 2, which also includes general industrial use.
Source : Business Times – 9 Dec 2009
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