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SINO Land has set a new benchmark price of $1,540 psf per plot ratio (ppr) for a commercial/hotel site with its top bid of $165.8 million for a site at Collyer Quay. For hotel sites alone, Sino Land's bid far exceeds the $520 psf ppr paid by Hong Leong Group for a site at Mohamed Sultan Road in November. It is also more than the $1,455 psf ppr that Lend Lease paid for the Somerset Central mixed development site in August.

In a class of its own: Sino Land will build a luxury hotel on the site with 120 rooms facing the sea

Most analysts, however, believe that the Collyer Quay site cannot be easily compared with other recent property transactions.

Knight Frank director of research and consultancy Nicholas Mak said the Collyer Quay site is in 'a class of its own'. A substantial portion - including Clifford Pier and the former Customs Harbour Branch building - has been gazetted for conservation. He also pointed out that the site includes part of the water body surrounding it, making future construction complex.

Mr Mak attributed Sino Land's bullish bid to the Hong Kong-based sister company of Far East Organization wanting to 'safeguard' its position in the area, where it also owns The Fullerton hotel. This benchmark price could now be used as a 'reference' by planning authorities for future land sales in the area, including the site between Marina Bay Sands and the Business Financial Centre, although Mr Mak believes that it will not 'impact the prices of Marina Bay that much'.

Sino Land put in the top two bids of $165.8 million and $161.8 million out of the three bids that were shortlisted by the Urban Redevelopment Authority based on concept. Eight bids were received in the two-envelop system.

The third highest shortlisted bid was $108.3 million from Park Hotel Group - 35 per cent lower than the top bid.

In a statement released yesterday, Sino Land said: 'The development will complement our historical and international award winning Fullerton Hotel, OneFullerton and the Fullerton Water Boathouse.'

Sino Land will build a luxury hotel with 120 'full sea-view rooms' taking up 45 per cent of the total gross floor area (GFA) of 10,000 sq m (107,639 sq ft) with the rest going to F&B, retail and entertainment uses.

Park Hotel Group director Allen Law said that its bid had a substantially larger percentage of the GFA going towards hotel rooms. 'We want to build our hotel brand,' he said.

Indeed, Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean said that someone whose bid includes a 200-room hotel would have not have been able to bid as high as Sino Land. 'You get better returns from commercial and retail space,' she added. Even so, Ms Chee expects that Sino Land will have to charge $400-$500 per night to make its hotel feasible.

David Ling, managing director of hospitality consultancy HVS International, who said that the price Sino Land paid is 'unprecedented', believes that the Hong Kong developer will probably focus on the F&B, retail and entertainment component too.

Mr Ling estimates that luxury hotel rooms should be around 60 sq m each. Sino Land however, said that about 4,500 sq m of the GFA will be for the hotel, which means that each room will only be 37.5 sq m big.

THE first-ever residential development in science hub one-north, tentatively named One Rochester Park, will be launched around Chinese New Year - and the project is expected to benefit from the new-found buzz of the Rochester Park area.

One Rochester Park: Most of the apartments in the project will be two-bedroom and three-bedroom units

The 368-unit development is right next door to the up-and-coming Rochester Park, a dining and retail enclave set against a rustic backdrop of undulating grounds and green canopies.

The project is developed by United Engineers (UE), which last year secured the public-private partnership (PPP) project to build a business hotel and mixed development in one-north from JTC Corporation.

Most of the apartments in the project will be 1,200 square feet two-bedroom and 1,500 sq ft three-bedroom units.

Separately, UE will also be building 250 hotel rooms and 120 serviced residence units.

The whole mixed development is designed by Tange & Associates, headed by the son of the late Kenzo Tange, who designed UE's flagship development UE Square about a decade ago.

Said UE: 'The design of one-north, of which the mixed development forms a part, is a self-contained concept - eat, live and play.

'It promotes the exchange of ideas and interflow of traffic, and as such does not promote boundaries between land use - and hence little or no use of fences.'

Market watchers said that it is hard to predict the launch price for the development as the concept is new.

UE has previously said that prices could start at about $550 per sq ft, but with the upward trend in property prices over the past few months, the launch price should be well above that when the time comes.

Prices will also be boosted by the area's new-found fame - it is fast becoming known for its F&B outlets housed in atmospheric colonial bungalows. UE gained two such bungalows when acquiring the site, which will soon be leased out to F&B tenants.

One Rochester Park is UE's first wholly owned residential project since the company successfully launched its apartments at UE Square a decade ago. Then, at the height of the property boom, units were sold out within a day, said the company.

Since then, while UE has taken stakes in other residential projects, it has focused on its core business of engineering and construction.

In a recent interview with BT, UE's chief executive Jackson Yap said that he was especially interested in working on more PPP projects with JTC.

UE's managing director David Liew said the company might also look into participating in the request for proposals (RFPs) to build Phase 2B of the cutting-edge science and engineering R&D hub Fusionopolis in one-north, after JTC said it will launch an RFP next year for private developers to build the project.

THE long-awaited collective sale of UIC Building on Shenton Way has finally been launched through an expression of interest exercise, with an asking price of more than $830 million.

On the block: With all-in redevelopment cost at about $1.4b, UIC Building would appeal mostly to big players

This works out to a unit land price of about $1,150 per square foot of potential gross floor area, inclusive of a total payment of about $204.2 million that the successful bidder will have to make to the State for development charges and to top up the site's lease to the original term of 99 years.

As the building was completed in the early 1970s, the site has a run of about 62 years.

Taking into account construction costs, fees and interest expenses, the all-in development cost could come to about $1.4 billion, say market watchers, which means that this site would appeal mostly to big players.

Mainboard-listed United Industrial Corporation, which owns 78.8 per cent of share values in the property, is expected to bid for the site. The minority owners in the building include Air India, Lee Tat, Comcraft, Korea's Woori Bank and Shankar's Emporium group.

'We are confident of getting approval from owners controlling at least 80 per cent of share values, once we get our price - in excess of $830 million,' says CBRE executive director (investment properties) Jeremy Lake, whose firm is marketing UIC Building.

'This is the largest collective sale in dollar terms ever launched. It is also the first major commercial collective sale,' he adds.

Under Master Plan 2003, the 72,960 sq ft site is zoned for commercial use with an 11.2+ plot ratio and qualifies for a 10 per cent bonus plot ratio. The site has a 35-storey height limit. The maximum potential gross floor area (GFA) of 898,867.2 sq ft is about 70 per cent more than the existing GFA.

Industry observers say that the successful bidder of UIC Building is likely to consider a residential development, given that City Developments has been given approval by the Urban Redevelopment Authority (URA) to redevelop its nearby No 1 Shenton Way site into a residential project. Known as One Shenton, it is slated for launch soon.

This is especially so given last week's strong sellout at the nearby Marina Bay Residences.

'Of course, given that office rentals and values are also appreciating strongly, and the shortage of office space building up on the island, a new office development also makes sense,' said a seasoned market watcher.

CBRE said that any change of use to residential or other uses such as hotel or service apartments is subject to approval from the relevant authorities.

Based on the guide price indicated by CBRE, UIC's owners will receive about $2,000 psf on their respective strata floor area in the building. This is about three times the $650 psf achieved for the last strata sale in the building - a mid-floor unit of 8,934 sq ft sold in October last year.

Meanwhile, another collective sale is also in the works on the same side of the street - at Shenton House, sandwiched between No 1 Shenton Way and UIC Building.

This means that this entire strip in the 'old CBD' is headed for redevelopment and rejuvenation. The owners of Shenton House recently held a 'beauty parade' to pick a marketing agent. The building is said to have more than 170 owners.

BT reported a year ago that URA and the Land Transport Authority (LTA) are looking into a possible future extension of McCallum Street which will involve a minor road being created between the Shenton House and UIC Building development sites, and this will connect the existing CBD to future developments in the Marina Bay area and also provide a pedestrian link.

However, the road extension will only be created in tandem with redevelopment plans for Shenton House and UIC Building. Although it will see the owners of UIC Building and Shenton House giving up part of their respective sites, they will be entitled to include the GFA on the land area to be vested in their redevelopment schemes.

The expression of interest for UIC Building closes on Feb 8.

(SINGAPORE) The widely watched Government Land Sales (GLS) programme for the first half of 2007 could see more office and hotel sites being offered, according to property market watchers.

"I think the government will have to do something given that office rents are shooting up.' - Knight Frank managing director Tan Tiong Cheng

Most expect the Ministry of National Development (MND) to continue using the Reserve List as the mainstay of its programme for private residential, commercial and hotel sites, since it has worked well.

Under this system, sites are released only upon application by a developer with an undertaking to bid at a minimum price acceptable to the state.

However, within the reserve list, MND could offer more office sites, particularly in the Marina Bay area. This, according to several property consultants, would go towards addressing the shortage of offices that has sent office rents soaring 45 per cent this year.

MND is also expected to offer more hotel sites, given bullish bids seen lately and the rosy tourism numbers, says Colliers International director (research and consultancy) Tay Huey Ying.

As for the private residential sector, she suggests the government could offer a couple of sites in prime districts to ride the current luxury housing boom and maximise returns from its land stock. Ms Tay suggests the former Raffles Institution site at Grange Road as a candidate.

Many developers and property consultants hope the government will not offer prime district residential sites, given the already substantial supply in this segment generated by the private sector over the past two years through collective sales. However, Ms Tay thinks that even if the government offers one or two prime sites - and through the reserve list at that - it will not have any big impact on the overall supply of such sites.

'It wouldn't be so much of an attempt to cool the high-end property fever, but more like maximising returns on state assets. There's no better time for the government to offer prime residential sites than when the luxury market is doing well,' she explains.

None of the 14 predominantly suburban residential sites currently available in the H2 2006 reserve list have been triggered for tender. While this could reflect the still tepid demand for mass-market homes, Ms Tay suggests that another factor could be that developers don't exactly find the currently available sites appealing - a point that might induce MND to add a few choicer suburban sites to the H1 2007 reserve list.

CB Richard Ellis (CBRE) executive director Li Hiaw Ho expects the residential sites on the H2 2006 reserve list to be carried over to H1 next year. He expects some of the existing sites to interest developers next year because of their location. These sites include Enggor Street near Amara Hotel in the city, Bishan St 22 and Dakota Crescent (in the Old Airport Road vicinity) relatively close to the city, and Simei St 4 and Simon Road (in the Upper Serangoon area) in the suburbs.

'Each of these sites is fairly close to an MRT station and basic amenities like foodcourts and markets,' says Mr Li.

Knight Frank managing director Tan Tiong Cheng disagrees with suggestions that MND should release more land for residential development in the vicinity of the two integrated resorts in Marina Bay and Sentosa, given the strong demand for homes in those areas.

His reason? 'Sentosa Cove Pte Ltd is still releasing land on Sentosa Cove and don't forget Keppel Bay (Phase 2) will have about 1,200 homes which will be released starting from early next year,' he says.

Mr Tan also notes that the string of office blocks in the existing CBD slated for residential developments will create new homes in the city not too far from the Marina Bay area.

Mr Tan argues there's a stronger case for the government to release office sites in its H1 2007 programme.

'I think the government will have to do something given that office rents are shooting up,' he says.

Agreeing, CBRE's Mr Li says: 'In addition to the existing site in Anson Road, some new sites in the Marina Bay area - Singapore's new downtown - will likely be added to help ease the shortage of office space.' Average prime Grade A office rentals have surged about 45 per cent this year to $8.50 psf a month currently, according to Jones Lang LaSalle (JLL), which is forecasting a further 25 to 30 per cent hike next year.

According to JLL's regional director and head of markets Chris Archibold last week, rental growth through 2007 to 2009 will be supported by several factors. These include the shortage of office space that's building up on the island - and the strong demand coming from banks seeking to locate their hubs in Singapore, and from MNCs and domestic firms.

A seasoned market watcher says that even the first phase of the Business & Financial Centre slated for completion in 2010 will have only 1.65 million sq ft of offices - 'not the mountain of space some had expected'. That space is expected to be pre-leased before the project's completion, still leaving the market with an office shortage.

'We've been wooing global financial groups to expand in Singapore. So we've got to create the space for them,' he says.