A RESIDENTIAL site facing Bedok Reservoir that failed to be sold 18 months ago after attracting only one bid of $84.6 million is now sought after by eight developers, with one offering $302 million.
The Tampines site was a victim of the financial meltdown when it closed for tender in August 2008, but the property market rebound has brought it back into favour.
Sim Lian Land lodged the highest bid for the 99-year leasehold plot, which would be suitable for mass market housing – the property industry’s hottest sector these days.
Sim Lian’s offer – $302 million or $420.90 per sq ft per plot ratio – topped seven others for the land at the junction of Tampines Avenue 1 and Avenue 10.
The huge rebound in price follows a similar tender last month when a site at the junction of Choa Chu Kang and Woodlands roads above Ten Mile Junction attracted a top bid of $164 million, yet in 2008 it drew a top bid of $61 million and was therefore not sold.
The Sim Lian offer was above the $300 to $400 pricing tipped by some experts but within the $410 to $470 psf ppr range forecast by Ngee Ann Polytechnic lecturer Nicholas Mak.
The second-highest bid from a venture between Far East Organization and Frasers Centrepoint came in just 4.3 per cent lower at $402.80 psf ppr.
Other bidders included MCL Land, Allgreen Properties and GuocoLand, according to the Urban Redevelopment Authority yesterday.
A unit of CapitaLand Residential was in seventh place with a bid of $179.4 million or $250 psf ppr, while Boon Keng Development was last with a bid of $234.20 psf ppr.
The tender is ‘another demonstration of developers’ interest in the mass market segment’, said Mr Joseph Tan, CBRE’s executive director, residential. Of the eight bids submitted, the first six were very close to one another, he noted.
DTZ’s South-east Asia research head, Ms Chua Chor Hoon, concurred, saying the results showed that developers were still very eager to replenish their land banks and optimistic about the market outlook.
Sim Lian Group executive director Diana Kuik told The Straits Times: ‘Our bid is competitive but not very aggressive. Land prices in general have gone up.’
Also, the site is in a mature estate and it offers a nice living environment, she said.
‘We are looking to build 600 to 650 units with a range of sizes, from small two-bedroom units to four-bedroom units as well as penthouses,’ she added.
CBRE estimates a break-even level of around $700 psf, based on the top bid.
It pointed out that caveats lodged for sales in new projects in the Bedok Reservoir area, such as Waterfront Key and Waterfront Waves, have ranged from $700 psf to $850 psf in the past four to five months.
‘When the new project is ready for launch in six to eight months’ time, we would expect it to be launched within the same price range or higher, subject to market conditions,’ said Mr Tan.
Sim Lian as a contractor would be able to manage its development costs and so may be able to sell units for around $800 psf, based on its bid, said Ms Chua.
The Tampines site, which has a maximum gross floor area of 66,655 sq m, is the fourth residential site launched for sale on the confirmed list this year.
Confirmed list sites are tendered out on scheduled dates, without the need for developers to indicate interest.
The Tampines plot is next to The Tropica condominium and about five to 10 minutes’ drive from Tampines Central and Tampines MRT station.
Only one firm, Boon Keng Development, bothered to bid for the site when it was first offered for sale in August 2008.
Source: Straits Times, 17 Mar 2010