$624m offer prompts tender of CBD site

A COMMERCIAL site in the central business district (CBD) has been put up for sale by public tender, after a developer offered to pay $623.7 million for the land.

The 99-year leasehold plot between Cecil and Telok Ayer streets was made available through the reserve list on the Government Land Sales programme on Dec 19. Sites on this list go on sale only if a developer commits to buy the plot for an acceptable minimum sum.

The 7,603 sq m plot can accommodate an office block of up to 50 storeys with a direct connection to Tanjong Pagar MRT station.

There is also 1,612 sq m of open area which will be used to form a network of green spaces extending through Tanjong Pagar, Duxton Plain and Pearl’s Hill parks.

The trigger offer translates to a unit price of about $750.97 per sq ft (psf) per plot ratio (ppr), excluding the open space, but experts feel the top tender will be far higher. They tipped last month, when the Urban Redevelopment Authority announced that an initial offer had been received, that the land would go for $830 to $980 psf ppr.

But Mr Donald Han, special adviser at HSR Property Consultants, said yesterday that he expects the top bid to cross the $1,100 psf ppr mark, pricing the site at about $913.6 million.

That would price the site, on a psf ppr basis, over the $1,006 psf ppr Guocoland paid for a nearby plot where it is now building the Tanjong Pagar Centre.

But it will still be far short of the CBD record of $1,409 psf ppr paid by Macquarie Global Property Advisors for a Marina View plot in 2007, noted Mr Han.

URA guidelines state that the maximum permissible gross floor area (GFA) for the latest site will be about 77,162 sq m, of which at least 61,730 sq m must be earmarked for office use. The remaining GFA can be for additional offices or other commercial uses.

The development cannot be subdivided into strata office units and sold off so the developer will have to rent out the space instead.

“This restriction could drive away boutique developers that would need the down payments of strata-subdivided units to fund the construction,” noted SLP International research head Nicholas Mak. The tender closes at noon on Aug 15.

ocheryl@sph.com.sg