THE Singapore Land Authority (SLA) has launched a public tender for the adaptive re-use of the former headquarters of the Internal Security Department (ISD) and Ministry of Home Affairs (MHA) at Phoenix Park, off Tanglin Road.

Designated for office use, the 641,851-sq-ft site houses 24 low-rise blocks with a gross floor area of 143,160 sq ft. The guide rent is $165,000 per month or $1.15 per square foot (psf) per month.

SLA is looking for a master tenant to take the whole site. SLA senior manager of project services Winston Cheah said: ‘The set-up of the premises allows for the tenant to parcel and sub-lease the blocks, each creating a separate identity.’

The site’s historic associations go back to the mid-20th century when the British Secret Service built the first blocks there after World War II. Their design was decided by Lord Mountbatten, then Supreme Allied Commander of the South East Asia command.

ISD’s predecessor, the Special Branch, moved in in 1948, until MHA moved in from 1977-2001. MHA was followed by Republic Polytechnic from 2004-2006.

Cushman & Wakefield managing director Donald Han says the fact that the buildings were recently used ’shows occupation readiness’, which should make them more attractive to bidders.

He reckons office rents there could be $4-$5.50 psf per month. So the developer will need to achieve a break-even cost of $2.50-$3.50 to see a good profit margin.

Mr Han also said the site has ample parking and outdoor space that could be maximised.

SLA also revealed yesterday that the tender for 10 Winstedt Road, formerly Monk’s Hill Secondary School, closed on April 16 with seven bids received.

The 164,798.5-sq-ft site and premises with a gross floor area of 83,889 sq ft drew a top bid of $211,328 per month or $2.52 psf per month from Allbest Equipments. This is 43 per cent above SLA’s guide rent of $147,300 per month or $1.76 psf per month.

Allbest general manager C H Chan said that if the company is awarded the site, it intends to use 5-10 per cent of the built-up area for its corporate office and lease out the rest at $7-$8 psf.

On the demand for such space, Mr Han said: ‘As long as it can be ready within six months, the market is still in the hands of the landlords.’

Source : Business Times - 14 May 2008

THE sprawling Phoenix Park site in Tanglin Road, which housed the Ministry of Home Affairs (MHA) for more than two decades, can now be leased for office use.

The 641,852 sq ft site, in the exclusive foreign embassy district, should help ease Singapore’s office space crunch.

The Singapore Land Authority (SLA) yesterday launched the site tender. The site is now also open for public viewing for the first time.

The historical buildings were built by the British after World World II. They also once housed the headquarters of the Internal Security Department, which is now at New Phoenix Park in Irrawaddy Road. The MHA moved into Phoenix Park in 1977 and stayed there until 2001, when it relocated to Irrawaddy Road.

The complex was then used by Republic Polytechnic for about two years until the middle of 2006, when the institution moved to its new campus in Woodlands.

The successful bidder will likely have to spend several million dollars to spruce up the rundown buildings before leasing them out. There are 31 blocks, of which 24 are single-storey and four are two- and three-storey buildings. Two substation blocks and one bin centre make up the rest of the buildings.

The four main blocks are now under conservation study, which means future tenants must retain the facades, including the windows and certain architectural features, during any renovation work.

The site - a gazetted tree conservation area - has a basketball court and four carparks.

The SLA wishes to work with a master tenant instead of several tenants. Its guide rent is $165,000 a month, or about $1.15 per sq ft (psf). The site has a gross floor area of 143,160 sq ft and can be leased for an initial three years, with options to renew the lease up to 2017.

Hean Nerng Holdings, a firm specialising in converting old premises for new uses, believes the site has good potential as an office location.

Mr Danny Wong, its marketing manager, said on a site tour yesterday: ‘Offices can lease out one whole block with their own entrance. It’s good for corporate branding.’

While the site is strictly for office use, the SLA allows for supporting uses such as a staff canteen, gymnasium and other food and recreational facilities.

Offices on the site may appeal to advertising firms, for instance, and could rent for $3 psf to $6 psf, sources said.

Due to tight supply, office rents in Singapore have surged to an average $17 psf to $18 psf for top buildings in areas like Raffles Place.

Since February last year, the SLA has helped relieve the shortage by tendering out 18 former schools and other vacant properties for office use. So far, 13 of them have been taken up.

Its tender for the former Monk’s Hill Secondary School off Bukit Timah Road attracted seven bids - all above its guide rent of $147,300 a month.

AllBest Equipment had the highest tendered monthly rent of $211,328, or $2.52 psf.

General manager C.H. Chan said it would use one of the four blocks for its corporate office and lease out the rest at possibly $9 psf to $10 psf.

The firm will spend up to $4 million on renovation, which will bring its break-even cost to about $6 psf to $7 psf, he said.

Source : Straits Times - 14 May 2008

The former Ministry of Home Affairs (MHA) Complex at Tanglin Road, which is also known as Phoenix Park, has been placed for tender.

According to the Singapore Land Authority (SLA), the prime site on the fringe of the Orchard Road belt will be open for adaptive re-use as office space.

Analysts said they are expecting to see strong interest due to the current office space crunch.

Winston Cheah, Senior Management, Project Services, SLA, said: “At the moment, there is an office space crunch. We are contributing by providing more office space. We hope the successful bidder can make this into an office icon.”

Phoenix Park has a land area of just under 57,000 square metres and a gross floor area of about 13,000 square metres. The tenancy is for an initial three years and renewable on terms up to 2017.

What makes the site stand out is its 31 individual blocks.

Danny Wong, Marketing Manager, Hean Nerng Holdings, said: “The potential is very good here. There are a lot of blocks. Companies are better off leasing one block to themselves, (compared to leasing) a commercial development where they have to share different floors. Over here, they can have their own space and their own entrance. This is good for companies who want a strong corporate image.”

And the sprawling landscape means more car park space will be available, compared to the financial district.

The current indicative rent of S$165,000 a month is also seen as tempting, despite the retrofitting work required.

Donald Han, Managing Director, Cushman & Wakefield (Singapore), said: “The current price as a guide price translates into about S$1.15 psf. If you’re looking at refurbishing this entire portfolio at a cost of about S$50 – S$70 psf, it (will) breakeven at about S$2.50 to S$3.00 psf. In this area, you can look at leasing anything from about S$4.00 to S$5.50.”

Cushman & Wakefield said bidders may pay up to S$4.00 psf.

“If you look at other transitional sites at Scotts Road near the MRT, the breakeven point is about S$5.00 psf. We lease that at about S$7.00 to S$8.00 psf. So where Phoenix Park is, with no easy access to MRT, we’re at S$5.00, not beyond S$6.00,” said Mr Han.

Likely tenants include those who may not require a city centre location, but would like to remain accessible to the financial district such as advertising agencies.

The tender closes on June 4.

Since February last year, SLA had tendered out 20 former schools, vacant community centres, childcare centres and institutional buildings for office use only.

Source : Channel NewsAsia - 13 May 2008

It bid $32.99m or $226 psf ppr for the office site

DB&B subsidiary Sun Venture Investments has been awarded a transitional office site at Scotts Road after emerging as the highest bidder last week.

Its bid of $32.99 million or $226 per square foot per plot ratio (psf ppr) for the 97,284.1 sq ft site was 3 per cent higher than the next highest bid received by the Urban Redevelopment Authority in the public tender.

DB&B develops and manages property assets and its CEO Billy Siew Kim Leng revealed that the overall construction costs could be in the region of $35 million, taking the overall development cost to about $68 million, including land cost.

The project, which has a maximum permissible gross floor area of 145,926.2 sq ft, will be partially funded through bank loans but even in the light of tightening credit markets, ‘funding will not be an issue’, Mr Siew said. This is probably because of the positive response from potential tenants.

Mr Siew had said last week that DB&B was in talks with two potential anchor tenants when it first ventured to bid for the site. However, since emerging as the top bidder, DB&B has received between eight and 10 expressions of interest, he said.

And the asking rent of $9.50 psf a month has apparently not put potential tenants off either, even though the first transitional office building being leased by Prudential Assurance Company Singapore on the other side of Scotts Road is being leased for $6.50 psf a month.

Mr Siew explained that as a built-to-suit office space provider, the office building will come fully fitted with raised floors, back-up generator and, more importantly, interior fittings, representing a cost savings for the future tenants.

The completion date is set for mid-2009.

Source : Business Times - 7 May 2008

TWO freehold industrial sites - at 18 Howard Road and 27 New Industrial Road, in the north-eastern part of Singapore - are for sale by tender at indicative prices of $30 million ($272 per sq ft per plot ratio) and $14 million ($278 psf ppr) respectively.

Charles Hoon, director of investment properties at marketing agent CB Richard Ellis, said the sites are zoned Business 1 under Master Plan 2003. This means 40 per cent of gross floor area can be used for purposes such as offices, showrooms or workers’ dormitories.

‘While industrial capital values and rents have recovered, industrial space still presents an attractive option, compared with office space, for businesses to relocate their backroom operations.’

The two sites are conveniently located and of regular shape, he said. And their freehold tenure is an ‘added advantage’.

The 18 Howard Road site is a 44,000 sq ft vacant plot in Macpherson Industrial Estate. The 20,000 sq ft 27 New Industrial Road is in the New Industrial Road cluster.

Separately, DTZ Debenham Tie Leung is marketing a 999-leasehold Good Class Bungalow (GCB) site in Yarwood Avenue. The 69,540 sq ft site, close to Binjai Park, has been put up for sale through an expression-of-interest exercise at an indicative price of $750-$800 psf.

According to DTZ, it has redevelopment potential to accommodate four GCBs. It now houses a single storey detached house with an outhouse, swimming pool and tennis court.

Shaun Poh, DTZ’s senior director for investment advisory services and auction, said: ‘This is a rarely available large plot of land in a prime location, offering a myriad of possibilities.’

Recent transactions of GCB land in the area include sites on Kilburn Estate for around $860 psf and Binjai Park for around $850 psf, he said.

Source : Business Times - 6 May 2008

A TENDER for a second temporary office site on Scotts Road and Anthony Road has attracted less interest than the first site adjacent to it.

Temporary sites are being offered for development as offices as part of efforts to ease an office space crunch.

Sun Venture (S) Investments, a development and property asset management company owned by interior design firm DB&B, put in a bid of nearly $33 million.

This price translates to $226 per sq ft (psf) of gross floor area, which is about 7 per cent lower than UOB Kay Hian’s recent bid of $242.50 psf for the first transitional plot at the same location.

Nevertheless, these bids remain above the top bid of $219 psf for an earlier transitional site in the area - Scotts Spazio, which is just across Scotts Road - that was released in August last year.

The second plot on Scotts Road and Anthony Road has a size of 97,284 sq ft and, like the first, comes with a 15-year lease. The other bidders were Scotts Development ($219 psf), Centurion Scotts ($171 psf) and Hersing Corporation ($157 psf).

All four also participated in last week’s tender for the other transitional plot, which attracted eight bids. Sun Venture was the second highest bidder in that tender, with a bid of $208 psf.

Last week’s tender would have weeded out those who could not pay, said Cushman & Wakefield’s managing director, Mr Donald Han.

The Government has now offered four transitional office sites, which would yield about 650,000 sq ft of space, said Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

Office rents have shot up significantly on tight supply in the past two years, though growth has slowed.

Separately, the Government has made available a commercial site in one-north for application. Developers who are keen have to commit to a minimum bid before the site can be put up for sale.

If triggered, the fairly large plot - it allows for a total gross floor area of 1.29 million sq ft - could attract bids of between $300 psf and $400 psf, said Mr Han.
 
Source : Straits Times - 2 May 2008

Offer is 7% below last week’s top bid for nearby plot

THE Urban Redevelopment Authority (URA) has closed the tender for a transitional office site at Scotts Road/ Anthony Road - receiving a top bid of $32.99 million.

This works out to be $226 per square foot per plot ratio (psf ppr) for the 97,284.1 sq ft site which has maximum permissible gross floor area of 145,926.2 sq ft.

Four bids were received with the highest bid coming from Sun Venture Investments, a subsidiary of interior design and build firm DB&B Developments Pte Ltd. Its bid was 3 per cent higher than the next highest bid of $32 million from Scotts Development Pte Ltd.

DB&B chief executive Billy Siew Kim Leng said that if it is awarded the site, it intends to lease the building fully. Already, Mr Siew said that it is talking to two potential tenants who may lease the entire building.

While Mr Siew did not say who these might be, a check with the DB&B website reveals that its current clients include ABN Amro Bank and Korea Development Bank.

If awarded, this will be the first development project for DB&B. Still, Mr Siew said this is the normal progression in terms of ‘vertical integration’ for its business.

He also said he was bullish on the office sector and is setting its sights on a monthly rental of $9.50 psf.

Cushman and Wakefield managing director Donald Han agreed that the site could eventually attract big companies. ‘I think corporations would be favourable to an address like this.’

He also said that as long as the locations were good, there would still be developers interested in such sites. ‘The entry level is low so it would be good for new developers,’ he added.

The potential over-supply of new office space after 2010 is not likely to affect demand for this site either. Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘The future supply is likely to be more spaced out than originally expected due to construction delays.’

Even so, Mr Ku estimates that rentals for transitional office space in the Scotts Road area is more likely to be around $7 psf a month.

While the DB&B’s bid is about 7 per cent lower than the top bid for the neighbouring transitional office site last week, Knight Frank director (research and consultancy) Nicholas Mak believes it is very likely that the government will award this site to DB&B, ‘taking into consideration that this average price of $226 psf ppr is slightly higher than the price paid for the first transition office site at Scotts Road last August’.

He added: ‘In an effort to ease the office space crunch, up to now, the government has awarded four transition office sites, which could yield about 650,000 sq ft of office space.’

Source : Business Times - 1 May 2008

A COMMERCIAL site slated for mostly office use near the existing Buona Vista MRT Station has been made available for application under the reserve list.

The 1.9-hectare site can yield close to 1.3 million square feet of gross floor area, of which 21,528 sq ft are for ground-floor retail use.

The 99-year site is in the biomedical hub of one-north and is being offered for sale under the Government Land Sale Programme for first-half 2008 by JTC Corporation.

The plot could be worth about $500 million assuming it fetches $400 per square foot of potential gross floor area.

JTC Corp said the plot will be developed into a high-rise commercial building that will provide office space for the business support companies of the research institutes at one-north. The plot is next to a new MRT station that will open under the Circle Line in 2010.

Cushman & Wakefield managing director Donald Han said the development, which will have about one million sq ft net lettable area, will benefit from spillover office demand from the surrounding biomedical facilities, as well as commercial office tenants and government departments relocating out of the Central Business District.

‘This is a sizeable investment, so bidders will be the big boys potentially looking at developing a project on a built-to-suit basis for anchor tenants. The end-product will be very suitable for sale to a Reit. It’s pretty untested ground, but the plot could fetch about $350-$420 psf per plot ratio (psf ppr). The breakeven cost will be about $1,000 to $1,100 psf of net lettable area,’ Mr Han added.

Colliers International managing director Dennis Yeo estimates the site to be worth a slightly higher $400-$500 psf ppr, reflecting a breakeven cost of around $1,200 psf of net lettable area. ‘Assuming an average rent of about $7 psf, the net yield will be about 5 to 6 per cent,’ he added.

Source : Business Times - 1 May 2008

JTC Corporation releases its North Buona Vista Drive (LX 1-1) site for sale under the government’s reserve list .

The 99-year lease site is located at the junction of North Buona Vista Road and Commonwealth Avenue West.

Under the Reserve List system of the Government Land Sale programme, the site would only be put up for tender after the minimum bid price received from a developer is found acceptable by the government. Interested developers will then have up to 8 weeks to submit their tender bids. - CNA /ls

Source : Channel NewsAsia - 30 Apr 2008

THE Urban Redevelopment Authority (URA) has released two more residential sites through the Government Land Sales (GLS) programme. And while interest is expected to be good, profit margins for developers will be slimmer.

A 1.08 ha site at Woodleigh Close, with a maximum permissible gross floor area of 30,167 sq m (324,714.5 sq ft), is up for sale via the GLS confirmed list. Cushman and Wakefield managing director Donald Han reckons the potential profit margin for a developer could be about 12 per cent.

This is based on a land price of $350-$380 per sq ft per plot ratio (psf ppr), factoring in construction costs and an estimated selling price based on current project launches. In the vicinity, Mr Han says Parc Mondrian and Blossoms at Woodleigh are going for $700-$850 psf. Noting that profit margins were 30-40 per cent until the effects of the US sub-prime crisis and global credit crunch took hold late last year, Mr Han said: ‘In bad times, profit margins can fall into single digit figures.’

The point, however, is that profit can still be made. ‘It’s a matter of who can control costs better,’ he said. ‘Construction companies can control costs better, so for them, even a baseline profit margin of 8 per cent is feasible.’

Reflecting market volatility, Knight Frank director (research and development) Nicholas Mak believes the land price for the Woodleigh site could be $300-$370 psf. ‘If the market turns bearish within the next two months, the bids will be at the lower end,’ he said. He expects four to eight bidders will take part in the tender, including major developers.

URA has also released detailed sale conditions for a 2.08 ha reserve list site in Upper Thomson Road, close to Bishan Park and Lower Peirce Reservoir Park, for residential development. The site has a maximum permissible gross floor area of 43,758 sq m (471,006.7 sq ft).

Mr Han said new projects in the area are going for about $850 psf. Factoring in construction costs and a developers’ profit of 10-12 per cent, he expects bids to be $380-$400 psf ppr.

Separately, the Housing and Development Board has made available a reserve list site at Sengkang East Avenue and Buangkok Drive for an executive condominium. The 17,000.8 sq m site has a permissible gross floor area of 51,002.4 sq m.

Source : Business Times - 30 Apr 2008