Why Paya Lebar bid was rejected

The Government’s intent to keep the commercial office market in Singapore competitive does not mean that it will sell State land below its fair market value, the Ministry of National Development (MND) said yesterday in response to a question asking why it rejected the joint bid from UOL Group and Singapore Land for a site in Paya Lebar.

Earlier this month, subsidiaries of the two developers submitted the only bid of S$529.3 million, or about S$566 psf per plot ratio, for the site, which the Urban Redevelopment Authority (URA) said was too low. In its retort to the rejection, the developers called on the URA to reveal its reserve price in future tenders.

In a written answer to the Parliamentary question submitted by Dr Lee Bee Wah (MP for Nee Soon GRC), the MND yesterday reiterated its plan to develop Paya Lebar Central into a major commercial hub over the next 15 years. The 2.1 ha site that was put up for tender was meant for a mixed use commercial development.

To preserve a stable and sustainable commercial property market and ensure the competitiveness of the Singapore economy, the MND said it would try to provide an adequate supply of commercial land to meet projected demand.

There is 930,000 sq m of office space in the pipeline, or about 200,000 sq m per year over the next five years, well above the historical take-up rate of about 150,000 sq m per year, the MND said. It would continue to release a regular supply through the Government Land Sales programme to meet demand.

Claiming that its efforts have helped to stabilise the office market, it said the rate of rental increase for commercial properties was slowing down, with island-wide rentals for office space rising 0.9 per cent in the third quarter, the lowest quarterly pace over the last six quarters.

Source : Today – 22 Nov 2011

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