Bid for 99-year Sengkang residential site

Analysts expect 2-3 times the committed bid of $70m for site

A 99-YEAR leasehold residential site in Sengkang has been triggered for sale from the government’s reserve list.

The plot, at the junction of Sengkang West Avenue and Fernvale Link, will be launched for a public tender in about two weeks. It is being made available after an unnamed developer committed to bid at least $70 million, or $128 per sq ft of gross floor area. But analysts expect it to fetch two to three times that amount in the tender.

Under the reserve list system, a site is only put up for public tender once an application is received from a developer who commits to bid at or above a minimum price deemed acceptable to the government.

The Sengkang parcel is 182,973 sq ft and has a maximum allowable gross floor area of 548,920 sq ft. It is estimated that about 450 units of 1,200 sq ft can be built on the site.

Market watchers say that the triggering of the site – likely to be the last triggered sale in 2009 – shows that interest in residential plots is likely to continue to be strong in 2010.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak expects three to seven bids for the site, and reckons that the top few bids will be in the region of $260-$300 psf per plot ratio.

Peter Ow, Knight Frank’s executive director for residential, is more bullish – he expects the winning bid to be in the region of $370-$420 psf per plot ratio. He also feels that the site will receive ‘more than a few’ bids.

‘It is still an upgraders’ market and I think there is still demand from HDB upgraders for projects,’ he said.

At the nearby 625-unit The Quartz, the average resale price of units over the past six months was $714 psf. But The Quartz is in a more attractive location, Mr Ow said.

The latest site is in a relatively undeveloped area, so the number of bids will be smaller than in previous government tenders, analysts believe.

Earlier this month, a landed housing site at Jurong West put up for sale by the government drew a whopping 32 bids. The top bid for the 99-year leasehold parcel was $38.5 million or $254 psf of land area.

Source: Business Times, 29 Dec 2009