DEVELOPERS have again shown how hungry they are for land.
Hong Leong Holdings has topped the tender for a popular condominium land parcel at Serangoon Avenue 3, which attracted a whopping 15 bids at its close yesterday.
The top bid, made through Intrepid Investments, came in higher than expected at $221.2 million, or $529 per sq ft (psf) of gross floor area. It is about 13 per cent ahead of the second highest bid of $195.9 million, or $468.3 psf of gross floor area, from Far East Organization's Tuas Hi-Tech Park.
The high offer price is 164 per cent above the trigger bid of $83.7 million, or about $200 psf of gross floor area. This is the minimum bid submitted by a developer to trigger a site for sale from the Government's reserve list.
Analysts had mostly expected the 1.38ha plot next to Lorong Chuan MRT station to draw bids of between $350 psf and $450 psf.
Some had expected fewer bidders and more cautious bids after the Government announced on Sept 14 that it was introducing measures to calm the housing market, including upping land supply.
But, according to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, the number of bidders and bullish top bids 'indicate that the government measures have not dented developers' appetite for attractive development sites'.
The Serangoon plot is near the Australian International School and can generate a maximum permissible gross floor area of 38,857 sq m.
Other developers in contention for the site included Keppel Land, Frasers Centrepoint, Sim Lian Land and MCL Land.
There were three tie-ups, including Sing Holdings and Kim Eng Holdings' Strategic Acquisitions, according to the tender results released by the Urban Redevelopment Authority.
China's Qingjian Realty and Singapore Press Holdings' Times Properties also joined the bidding.
'Developers are clearly keen to replenish their land bank as they believe the market is strong enough to absorb any new supply,' said Colliers International executive director (investment sales) Ho Eng Joo.
Property experts say most developers are running low on their supply of mass-market land, even if they still have high-end land supply. And now that confidence has returned to the mass and mid-tier markets, they are eager to dip in.
Experts estimate the top bid will translate into a likely break-even price of $900 psf to $950 psf, and a possible selling price of between $1,000 psf and $1,100 psf.
Nearby, deals at the 999-year leasehold The Chuan and the freehold Goldenhill Park have been clinched at $830 psf to slightly more than $1,000 psf.
Units at the 99-year leasehold The Springbloom were selling at $600 psf to $700 psf, pointed out CBRE Research. It expects to see demand coming from HDB upgraders living in five-room and executive flats in nearby Hougang and Serangoon. These flats, it said, have been selling for $350,000 to $550,000 per unit.
In total, four sites have been triggered and put up for sale since July after a long lull, and all have attracted more than 10 bids each and a top bid exceeding expectations.
Source: Straits Times, 8 Oct 2009
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