Pioneer Road industrial site closes after $8.2 mln bid

The tender for an industrial site along Pioneer Road North/Soon Lee Drive closed yesterday after an application bid of $8.2 million came in.

According to Li Hiaw Ho Executive Director of CBRE Research, eight bids were received by URA with Kng Realty Pte Ltd placing the highest bid of $19.4 million ($48 psf/plot ratio). The bid was 7.8% higher than the second highest bid of $18.0 million ($44 psf/plot ratio) submitted by Sia Kong Wah and Gimp Investment Pte Ltd and more than twice the application bid.

The breakeven cost for this development is estimated to be between $190 psf and $210 psf.

The highest bid of $48 psf/plot ratio is also higher than the $37 psf/plot ratio that Soilbuild Group Holdings Ltd paid for a 30-year leasehold industrial site along Pioneer Road/Tuas Avenue 11 in November 2007.

Kng was awarded an industrial site along Kaki Bukit Road 2 in August 2009. The developer paid $12.1 million ($105 psf/plot ratio) for the 30-year leasehold site.

Li says: “The healthy response to the tender reflects the more optimistic business sentiment. According to a survey conducted by EDB, a net weighted balance of 9% of manufacturers expected business conditions to improve in the six months ending March 2010.”