Govt rolls out two industrial sites

Source : Business Times - 28 May 2008

THE government continues to roll out new sites for sale against the backdrop of a quieter market.

The latest to be offered are two industrial sites - a confirmed list plot in Woodlands with Business 2 zoning being launched for tender, and a smallish plot at Kallang Pudding Road for Business 1 use that is now open for application under the reserve list.

Both sites are being offered on 60-year leasehold tenures and have 2.5 plot ratio (ratio of maximum potential gross floor area to land area).

Colliers International director (industrial) Tan Boon Leong predicts the 61,757 sq ft Kallang Pudding site, located in the established MacPherson/Al- junied industrial belt, will attract more attention with bids likely to be around $90-100 per square foot of potential gross floor area.

In contrast, the 180,835 sq ft plot at Woodlands Industrial Park E5 may fetch bids of only about $20 to $25 psf per plot ratio (psf ppr), Mr Tan reckons.

He notes that a 30-year leasehold site next door was sold last year for about $28 psf ppr but that was with a lower plot ratio of 1.0.

‘The latest plot has the highest plot ratio for an industrial site offered by the government in the Woodlands area since 2000. Industrialists generally don’t like operating in high-rise industrial facilities - because of the inconvenience and time consumed in moving goods and people up and down - especially in outlying areas like Woodlands and Tuas.

‘So the developer of this site may not be inclined to build up to the maximum plot ratio of 2.5, especially given rising construction costs. Any potential bidder will ask himself: ‘Should I bid high for the land and take a risk to build something industrialists may not like?’

With a Business 2 zoning, the site can be developed for a wide range of uses such as clean/light industry, general industry and warehouse.

‘The site is near established industries specialising in auto parts, hardware, furniture, scrap metal and waste management,’ Urban Redevelopment Authority said.

The tender for the Woodlands plot closes on July 22.

The Kallang Pudding Road plot, despite its triangular shape, is expected to be hotly contested.

‘It is suitable for development into an upscale flatted factory and sold on a strata-titled unit basis. The plot is very close to the main trunk road in the area - Aljunied Road,’ Mr Tan said.

The Business 1 zoned plot can be put to clean and light industrial, and warehouse use.