A parcel of land around Beach Road has been sold at a very competitive price at S$1.62 billion to a partnership compromising branches of the real estate property developer, the Guocoland. The winning bid likely runs close to S$1,706 per square foot per plot ratio.
At least five bidders joined plus some bidders such as the Japura Development, Kingsford Hurray Development and the lowest bidder, which is the Far East Organization who submitted a bid of S$1.29 billion.
The two-hectare development area gets the largest legitimate total floor area, approximately 950,592 sq ft. Office spaces at least accumulated the 70 percent of the progressing 99-year leasehold land area, the Urban Redevelopment Authority revealed.
The left land parcel can be utilized for the development of a hotel, retail, offices, residential purposes or serviced apartment.
The old Beach Road Police Station stood in the area and conservation and restoration of the building is expected to be done bt the developer. Each developer is compelled to construct an underground pedestrian route connecting to the nearest MRT station which is the Bugis MRT Station.
The executive director of ZACD Group, Mr Nicholas Mak, told that bullish bids are rationalized, pointing out the rents of the first class offices around Beach Road.
Whoever comes out as the top bidder is considered as the very bullish because it is 59.7 percent greater than compared to the unit price per land parcel that was owned by CDL, El-Ad and Istithmar Group last 2007 of September in the amount which reached close to $1,068.62 psf ppr. The area or site has been developed and transformed as South Beach Tower.
“The bids just define the developer’s trust and confidence over Singapore’s office market in the coming four, five or ten years. Possibly, when the new development on its full operation by 2020, the real estate developers then anticipates Singapore’s Office Market to be in the recovery stage. ”
The head of research at CBRE Singapore and Southeast Asia, Mr Desmond Sim, agreed to Mr Mak’s views and opinion regarding the office sector.
“The site provides immense capacity in leveraging Beach Road’s historical made structures and environment that harmonize the built Bugis and Suntec enclaves as much as the recent developments like the South Beach and DUO. The office department in the said submarket is building fast a building foothold while the South Beach experienced full occupancy and the neighbouring DUO still witnessing legs in leasing events.”
The head of research to Cushman & Wakefield Singapore, Christine Li, explained the absence of participation of the chief local developers because out of five bidders, four are foreign bidders.
” Though the Beach Road site has almost perfect attributes, the invisibility of credible and time-tested developers like the Keppel, CDL and Capitaland, in the recent tender is really expected. This is a manifestation of the faith and confidence of local players on having the chance to win the bidding. So clear, the spirit that foreign team possessed affected the locals bidding interest.”