A new commercial site in Tanjong Pagar

A new commercial site in Tanjong Pagar will be put up for public tender in two weeks’ time, just three weeks after a neighbouring site was released for sale.

An unnamed developer has agreed to bid at least $116.2 million for the prime 27,275 sq ft plot, the Urban Redevelopment Authority (URA) said yesterday.

The site is behind International Plaza at the junction of Anson Road and Gopeng Street.

This works out to about $460 per sq ft per plot ratio (psf ppr) - slightly more than the $448 psf ppr minimum bid that came in for a neighbouring land parcel last month.

That parcel was a slightly bigger plot at the junction of Anson Road and Enggor Street. It went on the market last month after a developer committed to a minimum bid of $172 million for the 39,826 sq ft site.

The interest in these two sites comes as Singapore is experiencing an acute shortage of prime office space, leading to a surge in office rentals that market experts have warned may threaten the country’s competitiveness.

To ease this supply squeeze, the Government said last week that it will offer about 3.8 million sq ft of commercial space in the second half of this year. Sites such as the Anson Road/Gopeng Street plot are part of this plan.

Property consultants said the site will be attractive to several parties, including property funds or investors.

‘We will see a significant level of interest from the usual suspects,’ added Mr Nicholas Mak, director of research and consultancy at Knight Frank.

These include developers which already have a presence in the area, such as City Developments and Keppel Land.

‘It won’t just be two or three bids, but probably five or more,’ he said.

Offers are likely to come in at between $150 million and $200 million, or about $600 to $800 psf ppr, predicted Mr Mak.

The 99-year leasehold site can host a 50-storey building with offices and shops. It has a maximum gross floor area of 252,069 sq ft.

It was put on the URA’s reserve list in October last year. Under this scheme, the Government will put a site up for public tender if a developer agrees to bid for it at an acceptable minimum price.

Source: The Straits Times, 19 June 2007