Ho Bee has emerged as the top bidder for a Buona Vista commercial site putting in $411m or $342 psf GFA. This was 7% above the other bid by Mapletree at $384m. With a max 1.2m sf GFA, the office cum retail development will be targeted at research institutes at One-North business park. Breakeven cost is around $950 psf, implying a yield of 4-4.5% based on the current rentals of $4.50-5.00.
This acqn is a departure from Ho Bee’s past focus on high end residential projects and could signal the difficulties of replenishing its landbank. Completion of projection is likely to take 3 years, which will mean the group will avoid the large supply of office space coming onstream till 2013. Prefer Keppel Land, CapitaLand and CCT for the office recovery play.
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