Mixed-use, hotel, EC sites added to reserve list

Published 1 June 2011
The Business Times
By Uma Shankari

Paya Lebar Central mixed-use plot seen drawing bids of $860-$940 psf ppr

THREE new 99-year leasehold state land parcels were released for sale yesterday: a 2.07 hectare mixed-use site at Paya Lebar Central; a 0.38 ha hotel site at Little India; and an executive condominium (EC) housing parcel at Upper Serangoon View.

Mixed-use, hotel, EC sites added to reserve listAll three sites are being offered under the reserve list. This means that each site will be put up for public tender only if the government receives an application from a developer who commits to make a bid at or above a minimum price set by the authorities.

Analysts were most excited about the land parcel at Paya Lebar Central, which can generate about 935,600 square feet of gross floor area (GFA). It is the second such site at Paya Lebar Central put up for sale by the government.

The site provides an opportunity for those who missed out on the first plot, said Credo Real Estate executive director Ong Teck Hui.

The first site drew 10 bids at the close of the state tender in April.

‘This Paya Lebar site comes hot on the heels of the tender closing of the Boon Lay white site (on May 25) and the first Paya Lebar commercial site (on April 21),’ said Mr Ong. ‘The two sites attracted keen interest and drew bids above expectations, reflecting strong demand for suburban commercial space.’

Added Nicholas Mak, head of research at SLP International: ‘There are not many new and good quality commercial buildings in this area, so the developer of this commercial space on this site will have a first mover advantage in this area.’

The site could sell for $860- $940 per square foot per plot ratio (psf ppr), he said.

The top bid for the first Paya Lebar Central site was $872 psf ppr.

At least 40 per cent and 15 per cent of the maximum permissible GFA of the project on the site will have to be set aside for office and hotel use respectively, said the Urban Redevelopment Authority (URA).

The remaining GFA can be for additional office, hotel, retail, entertainment or food & beverage uses.

A section of Geylang River flows through the site and provides an opportunity for the successful developer to integrate the water body into the future property and ‘bring life to the riverbanks’, URA added.

The hotel site, at the junction of Race Course Road and Perumal Road, has a maximum GFA of about 145,000 sq ft.

Analysts expect decent interest from developers for the plot, and said it could attract bids ranging from $72 million to $87 million, or $500-$600 psf ppr.

The site is likely to be triggered for sale soon due to its location, said Cushman & Wakefield’s senior manager of Asia-Pacific research, Ong Kah Seng.

‘Participants are likely to be average sized hoteliers or companies looking to develop the site into a mid-tier hotel project for those budget travellers who are still willing to pay for essential hotel accommodation,’ he said.

Added Mr Mak: ‘There is a good chance that it (the site) could be triggered for tender in the next one year or so.’

The third site – an EC plot at Upper Serangoon View – has a maximum GFA of 466,900 sq ft. It can accommodate around 420 flats.

But analysts said the possibility of this EC site being triggered is quite low in the short term as there is an ample supply of EC projects in the North-east region. But it could sell for anywhere between $250 and $390 psf ppr if triggered, they said.

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