It was second time lucky for a Tanjong Penjuru industrial site, after JTC accepted a bid that was significantly higher than the best bid in an earlier tender.
In January, after a first tender for the site, JTC rejected all bids as being too low. The 20-year leasehold site for B2 use was relaunched for sale in August via the Industrial Government Land Sales programme.
JTC said yesterday it is selling the 1.63ha site to Trans Eurokars for $13 million, or about $29.62 per sq ft per plot ratio (psf ppr).
This is well above the top bid the last time of $9.3 million, or about $21.19 psf ppr, by UBTS.
The latest tender drew two bids, with UBTS putting in the lower offer of $5.18 million or $11.80 psf ppr.
While the Government has been releasing industrial land on 20-year leases since late last year - and sites with leases just above 20 years from 2012 - this is the first time such a large site of over 1ha has been offered, said Mr Nicholas Mak, SLP International executive director.
A project on the site can be strata subdivided, unlike earlier sites allowing only strata subdivision from five years after completion.
Still, strata subdivision is unlikely to take place. "Looking at the size and land tenure, the site is certainly not for developers but end users," said Mr Lim Kien Kim, senior associate director in business space at OrangeTee. "No developer would go in for land plots that have 20 years' land tenure - it has to be at least 30 years to make some money out of it."
Apart from the large land area, it also has a plot ratio on the high side of 2.5. Most end users would not be able to absorb so much space, he said. This could have been reflected in the relatively low number of bids received for the site.
Eurokars Group executive chairman Karsono Kwee said the site's size "is a good fit to cater to our current and future growth". It will use it for repairs and maintenance, pre-delivery inspection, body repair and spray painting of all motor vehicle brands in its group - Porsche, Rolls-Royce, Mini, Mazda and McLaren. "It will also help ease our warehousing requirements as well as parts storage," he said.
As for whether 20-year leasehold land is indeed cheaper than land with longer leasehold, the sale price is less than the $82 psf ppr OKH Holdings paid for a 1.77ha, 30 year-leasehold Buroh Crescent plot in early 2013.
But compared with sites sold more recently, the Tanjong Penjuru price seems a bit of an outlier, as smaller sites on comparable leases in the area sold for much more. A 0.84ha site in Tuas South Street 11 with a lease of 20 years and four months went for about $77.30 psf ppr early this year, said Mr Tan Boon Leong, executive director of industrial services at Colliers International.