The Urban Redevelopment Authority (URA) closed the tender for the industrial site at Yishun Avenue 6 yesterday, with the highest bid coming in at $27.2 million.

Li Hiaw Ho, Executive Director, CBRE Research said,” An encouraging seven bids were received by URA with OKH Management Pte Ltd placing the highest bid of $27.2 million ($71 psf/plot ratio). This bid is 8.3% higher than the second highest bid of $25.1 million ($66 psf/plot ratio) submitted by Soilbuild Group Holdings Ltd and more than twice the application bid. The breakeven cost for this development is estimated to be between $250 psf and $270 psf.”

He said the healthy interest shown for the site could be due to the lack of industrial sites in Yishun. No sites in Yishun were awarded under the government land sales programme in the last 10 years. The latest transaction for industrial buildings located Yishun took place in November 2007. This was the sale of 61 Yishun Industrial Park A to MacarthurCook Industrial REIT for $24.6 million or $157 psf.

 “A more positive business sentiment could have also played a part in the robust respond to the tender. Manufacturing output for February 2010 showed a growth of 19.1%, a reverse from the contraction of 12.5% a year ago,” commented Li.

The site was launched for public tender on 8 March 2010. It was originally placed on the Reserve List of the Government Land Sales Programme. On 23 February 2010, URA accepted a successful application for the site to be put up for sale. The site was offered for sale on a 60-year lease.