Bedok site tipped at over $500m

Source : Business Times – 16 Dec 2009

Proposed project on reserve list site to be integrated with new bus interchange

A PLUM 99-year leasehold site next to Bedok MRT Station that some property consultants say could be worth more than $500 million is now open for application by developers through the Government’s reserve list.

The 2.49-hectare plot, which is zoned for commercial and residential use, can be built into a suburban mall with about 220,000 sq ft of net lettable area and a condominium with about 500 units, analysts say.

The proposed development will incorporate a new bus interchange, which will replace the existing interchange that is part of the site.

A maximum gross floor area (GFA) of 87,157.7 square metres (or 938,157 sq ft ) is stipulated for the plot. Of this, the retail component could be around 338,665 sq ft, translating to about 220,000 sq ft of net lettable area (NLA).

The project’s residential GFA could be about 562,900 sq ft. ‘Based on the simulation for the bus interchange done by Land Transport Authority, the estimated GFA for the bus interchange concourse is 3,400 sq metres (about 36,600 sq ft),’ said a spokeswoman for the Housing and Development Board, the sales agent for the land parcel.

CB Richard Ellis executive director Li Hiaw Ho points out that Bedok MRT Station is likely to be an interchange station for the future Eastern Region Line, which is scheduled to be built by 2020. ‘So this is going to be a very busy location. It’s ideally suited for another regional shopping centre with a residential component,’ he added.

The Government has previously said that the sale and development of the site will form part of rejuvenation plans for Bedok Town Centre.

Knight Frank managing director Danny Yeo says: ‘Bedok is a good location compared to many suburban areas because it’s not that far out. It’s a pretty mature town, currently served by older HDB shophouses. However, they are not very well connected and organised; a new mall will draw a lot of retailers as it’s going to be connected to the MRT station and integrated with the new bus interchange.’

HDB says the plot is located at the heart of Bedok New Town, which has a HDB population of about 196,000 currently.

Mr Yeo argues that the proposed mall will cater to not only these HDB flat dwellers but those living in condos and landed homes in the fringe of Bedok. ‘It will pose quite a bit of a challenge to malls in places like Tampines and Simei,’ he added.

He estimates the land value for the project’s retail component at about $800-900 psf of potential GFA while CBRE’s Mr Li put the figure at $850-900 psf per plot ratio (psf ppr). Either way, the breakeven cost works out to about $2,000 psf of retail NLA. Mr Li estimates a land value of about $400 psf ppr for the residential component, reflecting a breakeven cost of around $800 psf.

Mr Yeo predicts a good showing by developers at the tender. ‘They can sell the apartments to recoup part of the investment in the project. This will allow developers more leeway to bid more aggressively for the site,’ Mr Yeo suggests.

Being on the reserve list, the site will be launched for tender only upon successful application by a developer that undertakes to offer a minimum acceptable price.

Mr Li rates the chances of the site being triggered for release as quite high, despite the fact that the Government is scheduled to release eight residential sites on the confirmed list in the first half of next year.