Fraser & Neave (FNN) Ltd., the 130-year-old property and beverage conglomerate, won a bid for a commercial plot of land in Singapore’s central business district.
FC Commercial Trustee Pte, a subsidiary of F&N, put in the highest bid at S$924 million ($727 million), or S$11,974.18 per square meter (10.76 square feet), according to a statement by the Urban Redevelopment Authority on its website today. That was 19 percent higher than the next bidder, Euland Pte, which offered to pay S$777.78 million.
Average grade A office rents in Singapore rose 4.2 percent in the second quarter to S$9.03 per square feet per month from the previous quarter, according to Cushman & Wakefield. The office market has started to recover with increase in demand and rents, Cushman said on June 26.
“Given the view that the office market is at its trough, the top bidder can ride on the possible upswing in rents in the next few years,” Desmond Sim, associate director at CBRE Pte, said in an e-mailed statement.
Based on the top bid of S$923.95 million, CBRE estimates the break-even for this site will be as much as S$1,900 per square feet, he said.
The 7,603.2 square-meter site at Cecil and Telok Ayer streets was tendered on 18 June 2013. The site was offered for sale on a 99-year lease, according to the statement.
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