FIERCE competition for residential land shows no signs of abating as 15 developers submitted bids for a 99-year-leasehold site in Serangoon Avenue 3.
This is the highest number of bids put in for government residential land so far this year. The last three tenders had drawn 12 to 13 bids each.
The Urban Redevelopment Authority (URA) closed the tender for the Serangoon site yesterday, and the top bid of $221.2 million or $529 per square foot (psf) of gross floor area (GFA) came from Intrepid Investments Pte Ltd, a unit of Hong Leong Holdings.
Tuas Hi-Tech Park Pte Ltd, a Far East Organization unit, came in second with a bid of $195.9 million or $468 psf of GFA. The highest offer was some 13 per cent more than this.
The top bids for the site markedly surpassed property consultants' predictions - they had expected the numbers to fall closer to $400-$450 psf of GFA.
Other developers which put up offers for the site include Keppel Land, Frasers Centrepoint, Times Properties and Sim Lian Land.
The lowest bid came from Lippo Estates, at $120 million or $287 psf of GFA. The spread between the top and bottom bids was around 84 per cent.
The results show that 'market sentiments are still very positive', says Colliers International research and advisory director Tay Huey Ying. They also reflect the attractiveness of the site, she adds.
The plot is next to Lorong Chuan MRT Station and is close to several schools including Australian International School. It is also near Serangoon Gardens and the CTE.
CB Richard Ellis Research executive director Li Hiaw Ho believes the site's breakeven cost will be around $900-$950 psf. This works out to a selling price of some $1,000-$1,100 psf.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak expects the breakeven cost to reach $950-$990 psf, translating to a selling price of $1,100-$1,200 psf.
Near the site, a 99-year-leasehold condominium, The Springbloom, has seen transactions priced from $633-$706 psf, going by caveats lodged since August.
The Serangoon area is an established residential estate and tends to draw families which would need larger apartments. But some market watchers predict that Hong Leong may work more small units into its project to achieve the estimated selling prices.
Also, the site's proximity to the MRT station may draw some single professionals or potential landlords who would not mind smaller units, they say.
This is the second government residential land tender to close since the authorities announced several measures to cool the property market last month. There was also aggressive bidding at the previous tender for a residential and commercial plot at the corner of Yio Chu Kang Road and Seletar Road. Twelve bids came in, and the top bid was 35 per cent more than the second.
The Real Estate Developers' Association of Singapore said last week that it is in talks with URA to seek an increase in the supply of affordable sites outside 'hotspots'.
Source: Business Times, 8 Oct 2009
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