SINGAPORE - A battle between 10 bidders for a Woodlands industrial site resulted in a top offer of $72.7 million.
Property experts said on Tuesday that the crowded contest for a site that has a lease of only 30 years reflects the strong appetite developers have for industrial land.
Incorporated Builders lodged the top bid, which works out to $161 per square foot (psf) per plot ratio (ppr) for the 16,776 sq m parcel at Woodlands Avenue 9.
Incorporated's offer was 50 per cent more than the $107 psf ppr filed by next-placed Lian Beng Holdings.
"This is the widest price difference in an industrial Government Land Sales tender since the tender for (an) industrial site (in Tampines) in August 2012," noted Mr Nicholas Mak, executive director of research and consultancy, at SLP International Property Consultants.
The price differential between the top and second bids in that particular tender was 51.6 per cent, he said.
Other bidders for the site included Lian Soon Realty and mainboard- listed Wee Hur Development. The lowest bid of $55 psf ppr was made by NSS Development, a striking 192 per cent below the leading offer.
The Woodlands site is zoned B2, which is typically for heavy industrial use. It has a gross plot ratio of 2.5.
Last December, a smaller industrial land parcel with a similar zoning and plot ratio at Woodlands Avenue 10 drew only six bids.
R'ST Research director Ong Kah Seng said the aggressive top bid in this latest tender was justified because Woodlands is an established industrial area.
"Woodlands will also be increasingly positioned as an industrial location where end-users may enjoy synergy with Johor, which is rapidly developing," he noted.
CBRE Research associate director Desmond Sim agreed: "The site is also close to the Woodlands new checkpoint and will serve as a good distribution point for the movement of goods to and from the Causeway."
Experts added that the plot's main draw also lies in the Government's plans to develop the North Coast Innovation Corridor and the Woodlands Regional Centre.
The site's developer is also likely to lease out units instead of selling them because of the short 30-year tenure, added Mr Ong.
"Developers who participated generally expect good leasing interest due to its established industrial location," he said.
He added that there would be interest from industrialists in Woodlands looking to expand their production space in the same area.
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