Pioneer Road North site draws 8 bids

Highest bid of $19.4 million came from Kng Realty

A 30-year leasehold industrial site at Pioneer Road North and Soon Lee Drive has attracted strong demand, pointing to sustained confidence in the economy.

By the close of tender yesterday, the Urban Redevelopment Authority (URA) had received eight bids for the 18,958.8 square metre plot, which has a maximum gross plot ratio of two. The top bid came from Kng Realty Pte Ltd, at $19.4 million or $48 per square foot per plot ratio (psf ppr).

CB Richard Ellis Research executive director Li Hiaw Ho expects the development’s breakeven cost to range from $190-$210 psf.

Kng Realty’s bid is more than two times that of the trigger bid – an unnamed developer had committed to pay at least $8.2 million or $20 psf ppr for the land in October.

Kng Realty’s shareholders include Kim Chan Wah and Ng Hock Lye, both of whom are also shareholders of another company, Kng Development Pte Ltd.

Kng Development had won the tender for an industrial site at Kaki Bukit Road 2 in August. This firm’s other shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong.

The next highest bid for the Pioneer Road North site was $18 million or $44 psf ppr, which came jointly from Sia Kong Wah and Gimp Investment Pte Ltd. Kng Realty’s bid exceeded this by 7.8 per cent.

Other companies such as Soilbuild Group and EL Development also took part in the tender. The lowest bid came from Bok Seng Logistics Pte Ltd, at $9 million or $22 psf ppr.

‘The healthy response to the tender reflects the more optimistic business sentiment,’ said CBRE’s Mr Li.

According to Knight Frank head of industrial business space Lim Kien Kim, tender participants could also have been encouraged by good industrial space take-up in the Woodlands and Tuas South areas.

URA said it will evaluate the bids and announce the award of the tender later. Industrial sites it put up for sale in the last few months have seen healthy demand. For example, the one at Kaki Bukit Road 2 which eventually went to Kng Development drew as many as 18 bids.

Source : Business Times – 10 Dec 2009