Developer's $178m offer for Tampines plot tops 4 others
SIM Lian Land has put in what is likely to be a record bid for a design, build and sell scheme (DBSS) plot amid buoyant prices in the Housing Board market.
It topped the tender for a Tampines Avenue 5 site, released under HDB's DBSS, with a higher-than-expected bid of $178.13 million, or $261 per sq ft per plot ratio (psf ppr).
The offer was 22 per cent ahead of the second highest bid of $145.77 million, or $213.6 psf ppr, from China-based Qingdao Construction (Singapore).
In third place was joint venture Hoi Hup Realty and Sunway Developments' $139.9 million, or $205 psf ppr.
The plot attracted five offers, and construction firm Ho Lee Group came last with its offer of $110 million, or $161 psf ppr.
According to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, Sim Lian's bid sets a new land price record for a DBSS site and breaks the previous high of $237 psf ppr set in February 2008 for a Bishan site. He had expected the tender to draw up to seven bidders with offers of between $160 and $200 psf ppr.
At $261 psf ppr, Sim Lian will have to sell three-room flats for $380,000 to $400,000, and four-room flats for $530,000 to $550,000, said Mr Mak.
Five-room units would have to be pitched at between $640,000 and $670,000.
Sim Lian executive director Diana Kuik said the developer planned to build 680 homes on the Tampines site. She said the bulk of the units - 60 per cent - will be four-room flats. Three-room flats will account for 25 per cent of the total, while five-room units will make up the remaining 15 per cent.
'Tampines is an extremely mature estate and demand is very strong for new flats,' said Ms Kuik.
The Tampines site has a maximum allowable gross floor area of 63,395 sq m, including 1,060 sq m for social and commercial facilities. It is adjacent to Singapore's first DBSS project, The Premiere@Tampines, also developed by Sim Lian, which placed a bid of $82.22 million, or $113.67 psf ppr, in January 2006.
Response then was overwhelming and saw the pilot project almost five times oversubscribed. The five-room flats eventually went for $308,000 to $450,000.
Market watchers suggest Sim Lian's aggressive bid may also be because it is better able to control costs as it has its own construction arm.
Under DBSS, private developers can design, build and sell HDB flats directly to buyers, but they have to set aside 95 per cent of the flats for first-time buyers.
Source: Straits Times, 4 Aug 2010