According to Bloomberg, “Malaysian Tycoon” Quek Leng Chan’s company spent S$1.62 billion (reportedly equivalent to US$1.2 billion) for a development site. Bloomberg doesn’t tell us the size of the site, but the local source Today says it includes permission for a building of up to 950,592 sq ft., thus requiring a site cost of S$1704, or about US$1262, per square foot of building. My guess is that you could produce a very nice office building for construction cost less than $1200/sq ft, in which case site cost will actually be greater than the entire construction cost of the new building. Today notes a couple other costs for the developer:
- He has to replace the police station currently on the site
- This isn’t a fee-simple purchase, but a 99-year lease
Which I guess indicates that land is still a nontrivial part of the cost of doing business. No surprise.