HO Bee Investment is planning to invest about $1 billion to develop a commercial project at North Buona Vista Drive.
The company told BT this after it submitted the top bid for a 99-year leasehold commercial plot located in the one-north research area yesterday.
The tender for the 1.8 hectare site attracted two bids. Ho Bee's was $410.99 million, which works out to $342 per sq ft per plot ration (psf ppr).
The second bid came from Mapletree Investments, at $384 million or $320 psf ppr.
The site has a maximum allowable gross floor area (GFA) of 1.2 million sq ft. Ho Bee hopes to set aside some 1-2 per cent of space in the commercial development for retail shops. It is also exploring the possibility of having service apartments within the development.
The site has a good size for creating 'a landmark building in a very attractive location', Ho Bee said. It plans to lease the development out for recurring income when it is ready in about four years' time.
Market watchers had expected demand for the site to be lukewarm given its large size, which would involve a huge capital commitment.
But the site has other attractions: it is near Buona Vista MRT Station and lies within a growing research cluster for the biomedical, infocommunication and media industries.
CB Richard Ellis Research executive director Li Hiaw Ho believes the site can yield a net lettable commercial area of just under a million sq ft. 'This would facilitate the expansion of R&D functions at one-north and serve as an alternative source of office supply post- 2013 in the Buona Vista sub-regional centre.'
Sentiment in the commercial property market has picked up of late. Official figures show that office rents increased 1.1 per cent in the second quarter from a quarter ago. Prices of office space climbed 4.6 per cent.
There was also a net increase of 398,264 sq ft in office space demand in the second quarter.
Source: Business Times, 28 Jul 2010