Analysts see good demand just like for a nearby plot launched earlier
TWO more transitional office sites have been launched by the Urban Redevelopment Authority (URA) in a move to help ease some of the pressure on space.
The adjacent sites – parcel A is 8,682.8 sq m in size and parcel B is 9,037.9 sq m – are near the Newton MRT station, between Scotts Road and Anthony Road.
The sites can accommodate developments of up to four storeys that can be built within a year.
Transitional office sites, a relatively new concept, were introduced as a quick fix to the lack of space in the Central Business District (CBD).
They have 15-year leases, significantly less than the usual 99-year leases for commercial buildings.
The response has been mixed. A plot launched by the URA in Aljunied recently flopped, with all bids rejected as being too low.
The URA believes the Newton sites will fare better.
‘Based on market feedback, there is still demand for transitional office sites in the city centre,’ it said.
Property experts also expect a more enthusiastic response.
Mr Nicholas Mak, Knight Frank’s head of research and consultancy, said the prime location near the CBD and Newton MRT would draw bidders.
And the sites being adjacent means a developer could combine the land.
‘There is a potential for amalgamation to create bigger floor space,’ added Mr Mak, who estimated that the sites could sell for around $100 to $130 per sq ft (psf).
This values the parcels from $14 million to $19 million each.
Mr Mak felt the Aljunied site was ‘too close to the red-light district of Geylang’.
For the two latest plots, the industry experts interviewed expect a level of response similar to the Scotts Spazio site, which is across the road and was eagerly received by developers.
KOP Capital is developing the site, which cost $37 million, with partners Hwa Hong Group and Dubai Investment Group.
Insurer Prudential will lease the four-storey building for 14 years, paying $6.50 psf a month. The company should move in by September.
However, some experts believe that transitional office sites will not be commercially viable given their brief tenure. Tenders for the two Newton sites close on April 24 for parcel A and April 30 for parcel B.
Source: The Straits Times 29 Feb 08