Developer sets off sale of commercial site

one-north plot seen attracting bids of $320-350 psf ppr

A DEVELOPER has taken a fancy to a large commercial site at North Buona Vista Drive and is ready to pay at least $320 million for it.

The 99-year leasehold parcel is located within one-north, a research centre for the biomedical, infocommunication and media industries. It is near Buona Vista MRT station, Biopolis and the Ministry of Education.

The site spans 1.8 hectares and has a maximum allowable gross floor area (GFA) of 1.2 million sq ft. Of this, some 1.18 million sq ft can go towards commercial uses, while the remainder can be turned into retail space.

The trigger price of $320 million works out to around $266 per sq ft per plot ratio (psf ppr). JTC Corporation will put the site up for tender later.

Cushman & Wakefield managing director Donald Han expects to see less than five bids for the site, with the highest offer coming in at $320-350 psf ppr.

The parcel is a 'very big ticket item' located on the outskirts of town, so speculative players are unlikely to take part in the tender, he said.

The developer which triggered the sale of the site could be building a property for its own occupation, or a build-to-suit facility for a tenant, he suggested.

DTZ head of South-east Asia research Chua Chor Hoon added that with the commercial market showing signs of bottoming, 'there is increasing interest to buy or develop office buildings before the market rebounds.'

The government made the site available for sale on the Reserve List in April 2008. JTC noted that it can accommodate a high-rise building, providing office space for companies supporting research institutes at one-north.

Consultants note that the plot's location is fairly attractive. It is not too far from the city and will offer cheaper space for firms which do not need to be in the central business district (CBD), said Ms Chua.

According to Mr Han, monthly office rents in the Buona Vista area are around $3.50-$4.20 psf. In contrast, there are reports of asking rents at new Grade A buildings in the CBD going up to $9 psf.

Buona Vista is also turning into an interesting work-live-play area, he said. Rochester Park provides entertainment options, and there are also service apartments nearby.

Source: Business Times, 21 May 2010