SINGAPORE- 16 Developers fought their way out in a spirited 16-way contest over a plum plot near Aljunied MRT.
The prized trophy went to a small developer SL (Serangoon), a unit of Sustained Land who trumped some of the property game's bigger guns with a winning bid of $145.9 million for the compact site at Geylang East Avenue 1.
That translates to a price of $776 per sq ft (psf) per plot ratio (ppr) - well above market expectations of up to $650 psf ppr.
The 99-year leasehold plot has a land area of 67,146 sq ft, which can yield about 215 homes.
The bullish bids of this 2014 Government Land Sales site was attributed to its location near the Aljunied MRT station and the lack of State land tenders for small plots which are few and far between in recent years.
Comments from analysts:
OrangeTee research head Christine Li:
‘Previously, small developers had to team up in order to bid for the larger sites,’
‘The last one with a gross floor area of less than 20,000 sq m - or around 215,000 sq ft - attracted 23 bids. That was for a 109,478 sq ft site in Jalan Jurong Kechil in November 2012 that has been developed into The Hillford.’
R'ST Research director Ong Kah Seng:
‘Developers could be willing to bid bullishly just to secure a plot, and were less focused on making fat profit margins even if it meant that it may have to eventually sell at break-even price’
Sustained Land’s Douglas Ong Pang Chye:
‘I’m interested in the site because of its good location near the Aljunied MRT station.
‘Provided the Government doesn't have any more cooling measures, if it's a good site, it should be okay, despite weakness of the Singapore residential property market’
The second-highest offer is $759 psf ppr, lodged by a tie-up between Far East Organisation unit Tannery Holdings and Sekisui House.
The lowest bid of $555 psf ppr. was placed by Alliance Homes.
The plot put on the Government Land Sales reserve list in May last year was triggered for sale in December, after an unnamed developer promised to bid at least $95 million or about $505 psf ppr.
Consultants estimate that the development's break-even cost could be $1,230 psf to $1,300 psf, with selling prices about $1,420 psf.
Source: Straits Times – 24 Jan 2014