(SINGAPORE) An industrial site along Kaki Bukit Road 2, put up for sale by the government, drew an impressive 18 bids by the close of tender yesterday.
The Urban Redevelopment Authority (URA) said that the highest bid received for the 30-year leasehold site was $12.1 million, more than double the minimum bid price of $5 million.
That highest bid, which works out to just under $105 per square foot per plot ratio (psf ppr), was placed by Kng Development, whose shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong; Kim Chan Wah and Ng Hock Lye.
Kng's bid is 16.5 per cent above the second highest bid of $10.4 million, or $90 psf ppr, submitted by Lee Siaw Ling, Low Khoon Huat and Ang Lai Huat.
It is also higher than the $72 psf ppr which Eastpoint Development paid for a 30-year leasehold industrial site along Kaki Bukit Road 3 in August 2007.
This latest site, offered from the government's reserve list, has an area of 1.07 ha and a gross plot ratio of one. CBRE Research says that the breakeven cost for Kng Development is likely to be $250 psf.
'The robust response to the tender reflects the prevailing improving business sentiment,' said Li Hiaw Ho, executive director at CBRE Research.
He noted that the top six bids were all above $75 psf ppr and 'could be reflective of the bidder's expectations that Singapore's manufacturing sector will improve in the near future'.
Colliers International director (industrial) Tan Boon Leong said that the large number of bids received was not surprising as the 'quantum amount is small'.
He thinks that the good response reflects greater confidence in the economy, as well as the fact that the plot lies within a mature industrial estate and is zoned for a Business 2 development, which means that it can be developed for a range of clean, light and general industrial uses.
Mr Tan also said that some of the bids were placed by contractor developers 'who are probably more competent in judging their construction costs, and with prior experience, may thus be bolder when it comes to putting in bids'.
URA's decision on the award of the tender will be made after the bids have been evaluated, and disclosed at a later date.
Source: Business Times, 13 Aug 2009