Far
East makes top bid of S$421.1m for Somerset site
18 January 2006
By Matthias Chan, Channel NewsAsia
SINGAPORE
: The much anticipated tender for the Somerset site closed on Wednesday
with Far East Organisation emerging as the top bidder, beating five
others.
It
placed a bid of S$421.1 million, or S$1,085 per square foot of gross
floor area.
Analysts
said the top bid was within their expectations.
But
they noted that the winning bid for the Orchard Turn site was S$1.38
billion, or S$1,020 per square foot.
This
round, only two out of the six bids were higher than S$1,020 per
square foot, suggesting the general view among developers that Somerset
is not as prime as Orchard Turn.
Still,
market watchers say there are reasons Far East is interested in
the site.
Said
Donald Han, managing director at Cushman and Wakefield, "They
have an interest in the area. They have a substantial stake in Orchard
Shopping Centre, which is located just next to the Specialists'
Shopping Centre and the car park next door and I think there could
potentially be an interesting play for them to have won this particular
site."
This
time, Far East placed a bid which was 27 percent higher than their
offer for Orchard Turn, on a per square foot basis.
Among
the other bids, many had expected Centrepoint, which placed the
fourth highest bid, to have been more aggressive.
On
how the area will shape out, analysts do not rule out the possibility
of a joint development with adjacent properties.
Mr
Han said, "If Centrepoint can come out with a combination to
combine with Centrepoint Shopping Centre. If it can jointly redevelop
Specialists' Shopping Centre with Far East, I think that could potentially
be creating a mega shopping mall that could rival what's going to
come out in Orchard Turn."
All
eyes now will be on the second similarly-sized plot, also at Somerset.
The
site will be available come March this year.
Analysts
are expecting the bids to be just as competitive and say Centrepoint
is not out of the game yet.
