Relocating Brownfield Operations: Government Terms Must Avoid Entering a 'Landlord Competition

Purchasing land is essentially an acquisition of two core values: cash flow and exit options. While the lackluster tender response for the two industrial sites in the Northern Metropolis may seem like a reflection of weak market sentiment, a closer look at the terms reveals a consistent logic among investors. When the government acts as both the largest 'tenant' and a potential 'sub-landlord'—effectively competing for tenants within the same project—the Internal Rate of Return (IRR) inevitably takes a significant hit.

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