Developers are being invited to bid for a 1.35ha industrial site in Woodlands.
JTC Corporation launched the confirmed-list site yesterday.
The site at Woodlands Sector 2 is zoned for Business 2 (B2) development and has a 20-year tenure with a maximum permissible gross plot ratio of 2.0.
The launch comes under the Industrial Government Land Sales programme for the first half of the year. It is part of government efforts to offer more choices for industrial development.
Mr Nicholas Mak, executive director at property consultancy SLP International, expects up to four bidders, but expects the third and fourth bidders to come in quite low.
"Firstly, the land is irregular in shape.
" Secondly, it's in an area where there is an upcoming supply of 30-year leasehold industrial sites.
"And thirdly, it's a short lease," he said.
Mr Mak noted that with planning and construction time factored in, the length of the remaining lease could be a problem for companies in financing the purchase.
He explained that banks may not be comfortable giving them the length of the lease to repay the loan, including interest.
"If the business goes bankrupt, banks will have to sell the lease to repay the loan. It might be difficult to sell a lease that is too short," Mr Mak said.
"So companies may not get mortgage funding from banks over a sufficiently long period of time, which means having to pay high monthly instalments. Either that or the companies borrow less from the bank."
Mr Mak added that this is the third time the Government is experimenting with 20-year leasehold B2-zoned industrial sites with land area greater than 1 ha.
A maximum permissible gross plot ratio of 2.0 would allow "more space, and multiple storeys being built on the same land", he said.
"Because of this potential to build more space, businesses have to pay more for a short lease."
The tender for the parcel closes on May 24 at 11am.