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Sim Lian top bidder for Toa Payoh site

Its $38.23m bid for 99-year leasehold commercial site beats eight others

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 groundfloor 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 07

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