URA last night announced GuocoLand submitted the highest bid for the Beach Road commercial site at $1.622 million. A developer had triggered the site for sale by public tender in June. The reserve price was set at $1.138 million.
Based on a development with 100% Premium Grade A office tower, DBS lead analyst Mervin Song estimates the breakeven cost for the project to range between $2,242-$2,372 psf based on GFA or $2,803-$2,965 psf on net lettable area (NLA).
The implied price for the Singapore office portfolios owned by the various office REITs stands at $2,300-2,500 psf.
“Our top pick in the office sector remains Keppel REIT with a $1.23 target price given its attractive valuations. The implied price for its Singapore portfolio stands at about $2,500 psf versus recent market transactions for buildings of comparable quality at $2,600-$3,500 psf,” says
As at 11.48am, units in Keppel REIT are trading $1.18.
