
Far East Organization’s land bid yesterday points to declining office prices
Their bid, the highest among only three participants, was S$312m for the Robinson Rd/Cecil St land parcel.
OCBC Investment Research noted:
Yesterday evening, Far East Organization affiliates (Boo Han Holdings and Pearlvine) bid highest for the Robinson Rd/Cecil St land parcel at S$312m, or S$882 psf per plot ratio. We estimate a development cost at S$140m – S$180m and therefore an all-in price around S$1,600 – S$1,700 per sq ft NLA. Putting this against S$1,916 psf achieved at the Anson House transaction (85 years remaining) in May 11, and considering there were only three bidders, this indicates capital values expectations have at least stagnated over 3Q11 and that office developers are increasingly cognizant of heightened risks ahead. |