URA launches transitional office site

Business Times: Tue, Oct 04
(SINGAPORE) The Urban Redevelopment Authority (URA) launched a transitional office site at Mountbatten Road for sale by tender yesterday.

This marks the first time in more that 18 months that a transitional office site – that is, office sites that are launched for sale with 15-year leases – will be sold.

The last transitional office site, at Mohamed Sultan Road, was sold in March 2010.

The Mountbatten Road site is being launched two weeks after URA first said it has received an application from an unnamed developer to put up the site for tender.

The developer committed to bid at least $8.2 million or $65 per square foot per plot ratio (psf ppr). But analysts said that the top bid could be higher than $100 psf ppr.

‘Transitional offices could be used by office users who have budgetary constraints,’ said Alan Cheong, Savills Singapore’s associate director for research & consultancy.

‘At the moment, some of these users may be operating in industrial buildings, with questionable legality of use, paying rentals of between $3.50-4.50 psf per month. Attractively priced office space would appeal to these users who can then operate openly without fear of enforcement checks.’

Nicholas Mak, research head of property consultancy SLP International, said that the site could attract some SMEs.

‘It is fairly attractive as it is within walking distance to the Mountbatten MRT station. But it may turn away the bigger corporations which are concerned about the reputation of the location of their offices,’ Mr Mak said.

The Mountbatten Road land parcel has a site area of about 1.17 ha and a maximum permissible gross floor area of about 126,000 sq ft.

The site was first made available for sale through the reserve list in October 2008. The tender will close at noon on November 1.

URA first launched transitional office sites in 2007 as a creative solution to tackle immediate shortages in office space. Six sites have been sold since.
Source: Business Times © Singapore Press Holdings Ltd.

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