THE Housing & Development Board (HDB) on Thursday said that it has not accepted any bids for an industrial development site at Ubi Avenue 1 because “the prices offered were too low”. This surprised at least one consultant.
The Ubi site was launched for tender on June 30 this year. Situated just next to StarHub Green, it is zoned ‘Business 1’, with a site area of 0.6 hectares, a maximum gross plot ratio of 2.5, and a lease term of 30 years.
The tender attracted five bids in all. BP-DC Pte Ltd, a unit of Boustead Projects, submitted the highest bid of S$19.9 million, which translates to S$120.91 per square foot per plot ratio (psf ppr).
Tan Boon Leong, executive director of Industrial Services at Colliers, said: “S$121 psf ppr is quite a decent bid. I am quite surprised that HDB has rejected even the top bid. This is the market response to an oversupply situation. HDB’s decision is also not in line with the government’s intention to bring down prices.”
In the vicinity, OKH Holdings had bid S$23.3 million, or S$199.69 psf ppr, for a 0.43-hectare Tai Seng site. In March 2013, a site in Ubi went for a bullish S$172 psf ppr. But the industrial property market has weakened significantly since, with a huge supply expected to come onstream in 2016.
According to Mr Tan, the authorities would reject a bid when it is much lower than the chief valuer’s own valuation. They would also tend to not award a site when there is only one participant in the tenderer.
“But in this case, the participation is still quite healthy, the bids are still quite competitive. Quite a respectable bid, given the current market and especially with oversupply,” he said.
In this latest tender, Ascendas (Paya Lebar) put in the second highest bid of S$16.8 million. This was followed by Goldprime Development with a bid of S$13.6 million; Soilbuild Group Holdings with a bid of S$13.1 million; and YIHE Development (South Pacific) with a bid of S$8.8 million.
Earlier, consultants had expected the plot to pull in eight to 12 bids, with the top bid at S$100-120 psf ppr. They expected the site to garner good interest given that vacant industrial sites for sale in Ubi are rare.
The site is also very near MacPherson MRT station and has a 30-year tenure, considerably long since no site on the Confirmed List of the H2 2015 industrial government land sales programme has a lease of more than 20 years.