Singapore - Public Tender Launched For Two Plots At Tuas South Street
July 26, 2012
In line with government efforts to bring land costs down, the two plots are launched with short lease terms of 22 years.
Two industrial plots at Tuas South Street 6 and 7 have been launched for sale via public tender. Carrying a Business 2 zoning, the two sites are launched by JTC Corporation under the Industrial Government Land Sales (IGLS) Programme. They have a maximum gross plot ratio of 1.0.
The first plot, Plot 31, is located at Tuas South Street 6 and spans 0.86 ha. The second plot, Plot 26, is located at Tuas South Street 7. It has a slightly larger land area at 1.01 ha.
In line with plans to make industrial properties more affordable, both land plots come with short leasehold terms of 22 years each. The land plots are also targeted at industrialists who are seeking to custom-build their own facilities.
The tender for the sites will close at 11am on 4 September.
Savills Singapore expects interest in the sites to be moderate, and said that five or fewer bids are likely for the sites. Dominic Peters, director of industrial and business space, said that bids from the market were likely to be low; around SGD 80 psf ppr.
Ong Kah Seng of R'ST Research is more optimistic about the sites, predicting that bids would be in the range of SGD 90 to SGD 110 psf ppr. However he said that only three to seven bids were likely to be seen.
"Tenderers for the two sites are likely to be industrialists who find the earlier smaller plots 13, 15, 17 unable to accommodate their full operational requirements, including established industrialists with expansion plans in the short- to medium-term," said Ong.
"To downplay construction costs, factories with shorter tenure (less than 30 years) are likely to have conventional industrial property design, facilities and minimal amenities," he added.
Tan Boon Leong, Colliers International director (industrial) said that the response to the Tuas South Street sites would depend on the tender closing results of five industrial sites that were launched in June.
He was referring to five 23-year leasehold plots along Tuas South Street 7, 8 and 9 that were launched last month. Carrying Business 2 zoning, the sites range in size from 0.30 ha to 0.57 ha. The tenders for these sites will close this Friday.
"If you look at the history of IGLS, no end-user has ever won a site... so to make it more attractive for end-users to come in, the site tenure is intentionally kept lower... this gives more play for local-users to come in and bid successfully. Of course, developers can come in, but when they do, the chances of reselling is not too attractive because of the shorter tenure," said Tan.
Tags: Industrial commercial property, Business space, Warehouse for sale