URA, HDB launch sites to add office space to market

The tender process for two new office sites kicked into gear on Tuesday.

Together, the sites at Anson Road and Tampines will add about 70,000 square metres worth of office space to the market.

Both sites are on a 99-year lease.

The CBD site is on the reserve list of the Government Land Sales programme while the Tampines site, which is within walking distance from the Tampines MRT station, is on the confirmed list.

Analysts said they are expecting strong demand for these sites due to the improving economy and shortage of new office space.

The CBD tender site is located at the corner of Anson Road and Enggor Street, and is next to developments such as International Plaza and the upcoming condominium, The Icon.

According to some property consultants, the CBD site can fetch bids of up to S$950 per square foot per plot ratio.

They are expecting to see strong interest from mid-sized developers.

Colin Tan, Head of Research, Chesterton International, said: “One of the options developers can look at for this site is to develop strata-title offices because I feel there is pent-up demand for such properties, especially with the coming sale of UIC Building and Shenton House, which are both strata-title properties.

“Besides these two, there are several others like International Plaza which are all pretty old, about 30 years and above.”

As for the Tampines site, estimates are, it could go for slightly less at S$850 per square foot per plot ratio with interest likely to come from multinational companies that want to locate their support operations outside the city area.

“While MNCs can afford to pay the higher rentals right now for some of their backroom operations which do not generate much revenue, it may make sense for them to put these in places like Tampines where it is a lot cheaper,” said Mr Tan.

Some of these backroom work can include IT operations, human resources and payroll processing.

Tender for the Tampines site will be launched on March 21 while the tender for the Anson site will only be launched when the URA receives a minimum bid that is acceptable.

Source: Channel NewsAsia, 20 March 2007

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