Commercial plot at Paya Lebar Road attracts six bids

A land parcel at Paya Lebar Road/Sims Avenue for commercial development has attracted six bids at the close of its tender on Tuesday (Mar 31).

The top bid of S$1.67 billion was submitted jointly by Roma Central Pte Ltd, Milano Central Pte Ltd and Verona Central Pte Ltd. This works out to S$10,145.65 per square metre of the gross floor area (GFA).

Meanwhile, the lowest bid of S$889.18 million was placed by Excelsior Investments Pte Ltd.

The tender for the 20,694.7-square-metre site was launched on Oct 28, 2014. The site comprises two plots and is located next to Paya Lebar MRT station – at the junction of Paya Lebar Road and Sims Avenue.

“At least about 55 per cent of the total GFA of about 1.7 million square feet has to be dedicated for office use. You have got about roughly 22 to 23 per cent of the GFA that will be for retail, and then the rest of it will be for residential or serviced apartments, which will comprise about 440 units altogether,” said Mr Donald Han, managing director of Chestertons.

“This being in Paya Lebar, in the commercial zone, we will be looking at a pricing of anything from about $1,400-$1,550 per square foot roughly,” he added.

The site could be costly to develop, as the two plots are separated by Sims Avenue and the Geylang Canal.

In addition, the developer will have to shoulder costs of building underground linkage and elevated pedestrian networks, said SLP International Property Consultants.

Despite these challenges, analysts said the site attracted healthy interest among developers as it is well-located.

Mr Desmond Sim, Head, CBRE Research, Singapore & South East Asia, said in a statement that the number of bids “demonstrates continued confidence in Singapore as a global commercial hub”.

“The top bidder is clearly looking forward to Singapore’s long-term growth prospects backed by sound economic fundamentals, and not with a rear view,” he added.

Mr Han also noted: “It is interesting to note that Lend Lease and Abu Dhabi Investment Authority actually topped the bids. This shows generally that the Singapore projects, among foreign investors, are still seen as very high prospects in terms of the market for commercial and because of that, it will continue to be sought after by foreign developers, especially in this part of the world, for mixed development commercial projects.”

Meanwhile, Cushman & Wakefield said that by “disallowing developers to strata subdivide the office component beyond five strata lots, the premium quality of the office building is preserved” – and will likely appeal to large companies.

The Urban Redevelopment Authority said a decision on the award of the tender will be made after the bids have been evaluated.

The site was offered for sale on a 99-year lease term.

Source : Channel NewsAsia – 31 Mar 2015

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