SPH’s joint bid tops Sengkang site tender

Straits Times: Wed, Jan 18

A JOINT venture comprising Singapore Press Holdings (SPH) and the United Engineers Group has lodged the top bid of $328 million for a commercial site in Sengkang.

The offer by Earth Holdings, as the joint venture is called, works out to $1,156 per sq ft per plot ratio (psf ppr).

Market watchers had expected a top bid of about $800 psf ppr for the site, which is next to the Fernvale LRT station.

It was also about 21 per cent above the second-highest bid of $272.2 million submitted by Alpro Management Services.

There were 12 bids – from experienced mall developers and new entrants – vying for the plot at the junction of Sengkang West Avenue and Fernvale Road. The developers include Frasers Centrepoint, Mapletree and Sim Lian Group.

The 99-year leasehold site of 94,619 sq ft can be developed to a maximum gross floor area of 283,856 sq ft.

Any development is likely to be about 30 per cent smaller than Compass Point, the nearest mall.

Property experts believe the strong response could be attributed to developers being more optimistic about suburban retail.

Mr Ong Teck Hui, head of research at Credo Real Estate, yesterday said: ‘A retail centre with a trade mix that caters more to the needs of heartlanders is likely to be well patronised by shoppers, thus ensuring its viability.’

He added that many retailers are keen to establish a presence in new retail centres.

Sengkang’s healthy growth prospects are another draw for developers, noted market watchers.

Many plots in the area are primed for residential development, said Mr Png Poh Soon, Knight Frank’s head of consultancy and research.

Sengkang is a fairly new township, with a significant portion of its land already taken up by public housing.

While it is unclear whether those undeveloped plots would be allocated for public or private housing, Mr Png said any additional residential developments in the area would bring in new households, which could consist of young families with high income growth potential.

He also pointed out that malls in such areas are in short supply, another reason for the bullish bids.

‘You have to consider what is the immediate catchment of the site in the next few years,’ he said.

‘Looking at the location itself, you won’t see any malls within a 500m radius.’

cherlim@sph.com.sg

MALLS IN SHORT SUPPLY

‘You have to consider what is the immediate catchment of the site in the next few years… Looking at the location itself, you won’t see any malls within a 500m radius.’

Mr Png Poh Soon, Knight Frank’s head of consultancy and research

Source: The Straits Times © Singapore Press Holdings Ltd

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