Keen interest in Toa Payoh commercial site in Singapore

Keen interest in Toa Payoh commercial site in Singapore

Plot in Lorong 6 draws nine offers; Sim Lian puts in highest bid of $38m
By Joyce Teo, Property Correspondent

A SMALL commercial site in Toa Payoh has reaped an offer of $38.2 million after ‘aggressive’ bids by nine companies.
Sim Lian Development lodged the top bid for the 99-year leasehold plot in Lorong 6 but it was only a whisker ahead of its next closest rival.

Hersing offered $37.34 million for the 1,396.8 sq m plot, United Engineers Developments bid $36.1 million while HSR International Realtors came in with $35.5 million.

‘The bids are aggressive, which is reflective of current market conditions,’ said Mr Donald Han, managing director of Cushman & Wakefield.

Sim Lian’s bid works out to $847.5 per sq ft (psf) of potential gross floor area. It plans to build an office block to ride on the red-hot office market, which is seeing rising rents amid an acute shortage.

If it is awarded the site by the HDB, the firm - wholly owned by privately held Sim Lian Holdings - will proceed quickly.

Sim Lian Holdings director Ken Kuik said the company hopes to complete construction in two years, before more supply comes on stream elsewhere in Singapore. The first phase of the mega Marina Bay Financial Centre will be ready around 2010.

The block, which can be built up to a gross floor area of 4,190.4 sq m, could be 10 to 13 storeys with some retail shops on the ground floor, said Mr Kuik.

Office space will be aimed at smaller firms, particularly those forced out of the Central Business District (CBD), he said.

CBD buildings have been registering record rents and the sharpest increases recently.

‘It’s for long-term investment,’ said Mr Kuik. ‘We should be able to achieve rents of $7 to $7.50 psf on average.’ That is the level HDB Hub offices are commanding, he added.

Mr Han said: ‘If Sim Lian can rent out the space at about $7 psf, it would justify a net yield of about 4.5 per cent, which is the prevailing market yield for suburban offices.’ He added that further upside is likely.

Rental hikes in the office market have prompted more firms to consider cheaper locations further from town, in business parks or in other industrial space.

‘Suburban offices will continue to enjoy spillover demand,’ said Mr Han.
Source : Straits Times - 17 Oct 2007

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Singapore Horizon Towers’ STB hearing starts on Oct 30

Singapore Horizon Towers’ STB hearing starts on Oct 30

HEARING dates, which should still allow enough time for the collective sale to go through before the Dec 11 deadline, have been set for the Horizon Towers case.
The Strata Titles Board (STB) will adjudicate in the contentious sale application starting on Oct 30 and running on selected days until Nov 15, if needed, said sources.

If the $500 million sale of the Leonie Hill estate is not completed before Dec 11, the deal could be off. The sale remains in limbo after the STB dismissed the initial application on a technical error in August. That ruling was overturned by the High Court last Thursday, sending the application back to the STB.

At the hearing starting this month, STB will hear from minority owners objecting to the sale and rule on whether it can go ahead.

Lawyers from Allen & Gledhill, which are representing the intended buyers, have applied to the STB to be a party at the hearing. A decision on this is expected next Monday. While the hearing dates have been set, the process could still be derailed if minority owners appeal against the High Court’s decision. They are believed to be considering the option.

Consenting owners at Horizon Towers also have another legal matter to deal with - a lawsuit from the intended buyers, headed by Hotel Properties. They claim that the owners breached their sale contract and are claiming up to $1 billion in lost profits. The suit has been put on hold but remains a threat to the owners.
Source : Straits Times - 17 Oct 2007

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Singapore Hotel site at Sturdee Road put on reserve list

Singapore Hotel site at Sturdee Road put on reserve list

0.61 hectare plot can yield an estimated 430 hotel rooms
By ARTHUR SIM

A HOTEL development site at Sturdee Road has been put on the reserve list of the Government Land Sales (GLS) programme.
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The site is one of the four new hotel sites on the GLS programme for the second half of this year.

There are already five hotel sites on the reserve list, with two more expected by the end of the year.

The 0.61 ha site could go for between $430-$450 per square foot per plot ratio (psf ppr), it is reckoned by Donald Han, managing director at Cushman & Wakefield.
Mr Han noted that a white site at Race Course Road recently sold for $430 psf ppr in September. He said: ‘The Race Course Road hotel site may be located nearer to the MRT station than the Sturdee Road site, but hotel market sentiment is increasingly more optimistic now, judging from higher than expected bid prices for the Upper Pickering Street site.’

The site mentioned went to Hotel Plaza for $253.2 million or $805 psf ppr.

Other recent successful hotel site tenders include one on Tanjong Pagar Road/Gopeng Street awarded to Carlton Properties for $123 million, or $573 psf ppr in June. In July, a site at Tras Street went to businessman Chng Gim Huat of the CGH Group for $97.1 million, or $562 psf ppr.

The Sturdee Road site has maximum permissible gross floor area (GFA) of 18,334 sq m and can yield an estimated 430 hotel rooms.

A minimum of 60 per cent of the total GFA must be used for hotel rooms or hotel-related uses. The rest can be for commercial, and/or residential uses.

So far, the other hotel site put on the reserve list for H2′07 is at Jalan Bukit Merah/Alexandra Road.

The Urban Redevelopment Authority withdrew a hotel site at Balestier Road/Ah Hood Road from the reserve list this month.

About 9,100 new hotel rooms are expected to be completed from the second half of 2007 to 2010. This includes the supply of new hotel rooms from the two integrated resorts, Marina Bay Sands and Resorts World at Sentosa, which are expected to be completed in 2009 and 2010.

Source : Business Times - 17 Oct 2007

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Sim Lian top bidder for Toa Payoh site in Singapore

Sim Lian top bidder for Toa Payoh site in Singapore

Its $38.23m bid for 99-year leasehold commercial site beats eight others
By KALPANA RASHIWALA
SIM Lian Development Pte Ltd yesterday put in the top bid of $38.23 million, or $847.54 per square foot per plot ratio (psf ppr), for a 99-year leasehold commercial site next to HDB Hub in Toa Payoh.
The company, which is not part of the listed Sim Lian Group, plans to develop a largely office project with ground-floor retail space, Sim Lian Development director Ken Kuik said when contacted by BT yesterday.

‘Our all-in investment could come in at about $55-57 million, with a breakeven cost of about $1,500 psf of net lettable area. We’re looking at a net yield of over 5 per cent when the project is completed in, say, two years’ time,’ Mr Kuik said.

‘That’s on the assumption that the average gross monthly office rent in the location could climb to about $8 psf by the time the project is completed. The retail space may fetch around $15 to $20 psf a month,’ he added.

The development, which could be around 10 to 15 storeys, will have about 37,000 square feet net lettable area.

Sim Lian Development plans to hold the development for long-term investment. The company is a private vehicle of the Kuik family that controls listed Sim Lian Group.

The tender for the 15,035-sq-ft site at Lorong 6 Toa Payoh attracted nine bids. Sim Lian pipped the second-highest offer of $37.34 million by Hersing Corporation by just 2.4 per cent. The other bidders were United Engineers Developments ($36.10 million), HSR International Realtors ($35.54 million), Evan Lim & Co unit EL Development ($23 million), Mr Sia Kong Wah ($20 million), Superbowl F&B Pte Ltd ($19.3 million), MV Land ($18.18 million) and Eng Wah Organisation unit Wah Pho with a bid of just $1.29 million, or $28.70 psf ppr.

Hersing Corporation, which narrowly missed out being the top bidder, had a scheme for an eight-storey complex for the site, not unlike Sim Lian’s, comprising ground-floor retail and offices above. ‘The offices might have been partly for our own use with the rest, along with the retail space, to be rented out,’ Hersing director Janice Chng said.

Hersing holds the master franchise for ERA for 18 countries in Asia-Pacific. The group’s other businesses include providing self-storage facilities in Singapore under the Storhub banner.
Source : Business Times - 17 Oct 2007

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F1 lighting plan all set for thumbs up- Singapore

F1 lighting plan all set for thumbs up- Singapore

A 6.3km-long aluminium truss will be built along the length of the track
By NISHA RAMCHANDANI
SINGAPORE is heading into the final lap of preparations for the 2008 Formula One Grand Prix, with the lighting plan for the street circuit set to get the thumbs up from the sport’s governing body.

Bright spot: Tests were carried out at the Paul Ricard High Tech Test Track to ascertain the effectiveness of the lighting system in real racing conditions
The Federation Internationale de l’Automobile (FIA) and lighting contractor Valerio Maioli have said they are confident that Singapore’s inaugural event will write a page in racing history as a night race.

Once FIA gives official approval, work on the lighting system will start straight away, Colin Syn, deputy chairman of Singapore GP, said yesterday.

Singapore GP said it has signed a letter of intent with Italian company Valerio Maioli to design and construct the system.

Challenges associated with a night race must be overcome - chiefly, ensuring the safety of drivers and marshals and illuminating the circuit uniformly to meet high definition television broadcast standards.

And Singapore’s street circuit presents its own problems.

As the track is temporary, the lighting system will have to be assembled and dismantled annually.

But underground ducts cannot be used for cables. And on top of this, the trees along the road could obstruct the path of the lighting system and have to be worked around.

The solution to all this is a 6.282 km-long horizontal aluminium truss - supported by vertical steel pylons - built along the track.

Almost 1,500 lighting projectors will be installed on the truss, providing a combined 3.18 million watts that will make the track almost four times brighter than a stadium.

But that won’t worry the drivers. The angle of the projectors will prevent light beams blinding them - even if there is heavy rain or puddles on the track.

No need to worry about a crash either. A special support on the truss will allow for a safety junction between truss and pylon, just in case a pylon is hit during the race.

The safety junction will break but the truss will stay up.

What about getting lost? Unlikely, as run-off ways will be lit with a different intensity from the track so drivers do not mistake one for the other.

OK, say there’s a blackout? To guard against such an unexpected and unlikely event, electricity will be produced by 12 twin-power generators fitted in special protected areas.

Each generator has the capacity to produce enough energy for the entire system in its area, should one fail.

‘I explained to them that we studied all the technical problems for the light, for the power systems, for the truss. At the end of the meeting they were happy,’ said Mr Maioli of Valerio Maioli, saying he is sure FIA will give the go-ahead for a night race.

The cost of the lighting system is yet to be finalised, but it could be in the range of $3-6 million.

‘We’ll try to keep it low by using local contractors,’ Mr Syn said.

Tests were carried out in July and September at the Paul Ricard High Tech Test Track in Le Castellet, France, to ascertain the effectiveness of the lighting system in real racing conditions - and they went off without a hitch.

The lights will be brought to Singapore for testing in a controlled environment in early January 2008.

Setting up the system, which is expected to take two or three months, should start in the second quarter of 2008.
Source : Business Times - 17 Oct 2007

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Motorsports to put Singapore Changi on fast track

Motorsports to put Singapore Changi on fast track

Multi-million-dollar circuit being planned will host all sorts of races except Formula One
By SAMUEL EE

(SINGAPORE) In time, they could be putting pedal to the metal and burning rubber in Changi.

Revving up: The project is expected to be offered to interested parties on a tender basis. Work is likely to begin early next year, and construction could take at least a year.
The government is expected to announce a plan soon for a new motorsports track in Changi.

The facility will host races by vehicles ranging from go-karts to touring cars, which are essentially souped-up saloons, as well as open-wheeled cars like those in the A1 Grand Prix. Anything, in fact, except Formula One cars.

This is because the Changi track is intended to be an ‘accessory circuit’, to complement the F1 race on a street circuit in the heart of the city already scheduled for next September.

‘It doesn’t make sense to build another circuit for F1,’ says a source. ‘This way, Singapore can have the best of both worlds.’

The project is intended to build on the huge interest in motorsports generated by Singapore’s first F1 race, which will be held on Sept 28 next year.

‘The aim is to have a facility that can sustain this interest all year round,’ adds the source. ‘It is a very good development for Singapore motorsports.’

The idea for a permanent circuit was believed to have been suggested by the Prime Minister’s Office. But because it involves motorsports, it will come under the purview of the Singapore Sports Council.

The project is expected to be offered to interested parties on a tender basis. Work is likely to begin early next year, and construction will take at least a year.

There has been some speculation about the location of the circuit and several sites in Changi have been identified, including Loyang and the former site of the Asian Aerospace show.

But Loyang is too close to residential areas while there are security considerations over the other location because of its proximity to the airport.

Instead, land beside the Singapore Air Show grounds, off Changi Coast Road, is said to be the likely spot for the circuit. There will be enough space for a track of up to 4 km, a pit building, garages and other facilities.

How it would probably work is as follows. The government would identify the site and release the land along with the required approvals, with private sector bidders invited to propose the infrastructure.

‘It is like an open-ended exercise and the best comparison is to the integrated resort - apart from the casino, the bidder can suggest what other buildings and attractions he thinks should accompany it,’ says an industry observer.

Because of this process, the maximum cost of the project is hard to predict. ‘It depends on how elaborate the final design will be,’ the source says.

But the race track alone will cost around $4 million, with construction costing about $1 million per kilometre. ‘Asphalt is expensive,’ the source says.

Last year, it was reported that JTC Corp was due to award a site along Jalan Ahmad Ibrahim, near the Tuas Checkpoint, for an $80 million race track. That proposal did not get the starting-flag, however.

State land on Tuas West Drive was nevertheless released earlier this year for Singapore’s first motocross track. The 25,000 sq m site will have a 1.7 km track as well as infrastructure such as a grandstand, cafe and shops. Work is expected to be completed early next year.
Source : Business Times - 17 Oct 2007

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