Two tender closings signal developers' unabating land appetite | ON TRACK
Forgot your password?
or

Don't have an account? Create An Account

For agents interested in participating on SRX, please contact us at +65 6635 3388 or write to us at feedback@srx.com.sg

ON TRACK

Achieve the life you want, in the home you love
Property News06 Dec 2017

Two tender closings signal developers' unabating land appetite

DEVELOPERS' appetite for choice sites has shown no signs of letting up despite warnings from the government on over-exuberance in the property market.

Two residential land parcels at Jiak Kim Street and Fourth Avenue under the government land sales (GLS) programme saw keen contest on Tuesday, with Frasers Centrepoint Limited (FCL) setting a new price benchmark for the Jiak Kim Street site.
Jiak Kim Street Aerial view

The Singapore-listed developer topped 10 bidders with its S$955.41 million tender or S$1,733 per square foot per plot ratio (psf ppr) - the highest land rate achieved for a pure residential GLS site and residential with commercial on the first storey site.

This marks a stark 39.9 per cent jump from the last high of S$1,239 psf ppr that GuocoLand paid for the site at Martin Place last June, where it is developing Martin Modern.

Robert Kuok's Allgreen Properties, which already scooped up two collective sale sites at Bukit Timah area last week, zeroed in on the site at Fourth Avenue with a top bid of S$552.96 million.

Beating six other bidders, its tender reflects a bullish land rate of S$1,540 psf ppr. But this is dwarfed by the benchmark price already set in the area by its en bloc purchase of Royalville for S$1,960 psf ppr last week. The two 99-year leasehold GLS sites were originally on the Reserve List of the Government Land Sales programme and were triggered for public tender after the government received minimum acceptable bids for them. The 13,482 sq m site at Jiak Kim Street, the former site of popular nightspot Zouk, comes with commercial use on the first floor.

"Despite the authority flagging the risk of excessive exuberance in the property market and the simultaneous closing of two large state land tenders, the bidding for choice sites has not shown any sign of slowing," said Cushman & Wakefield research director Christine Li.

She noted that based on the median selling price of Martin Modern at S$2,343 psf in October, FCL is probably pricing in a slight appreciation of around 6-7 per cent for the selling prices of the future development.

Tricia Song, who heads research for Singapore at Colliers International, believes that FCL is projecting a rise of 10 per cent in average selling price for residential units at Jiak Kim Street over the median price for nearby Martin Modern in October. "The bullish bids for Jiak Kim Street site came on the back of its attractive locational attributes, limited supply of development sites in the area and brisk home sales in the vicinity," Ms Song added.

Half of the 10 bidders also submitted bids within a tight band for Jiak Kim Street site, she pointed out. FCL's bid came in at only 0.6 per cent above the second-highest bid from Hong Leong Holdings and Hong Realty, controlled by Singapore tycoon Kwek Leng Beng.

Citing strong locational attributes of the site, Frasers Centrepoint Singapore CEO Christopher Tang said that it is "a rare location in a cosmopolitan locale, filled with rich heritage and character, sitting right on the edge of the Singapore River".

Since the site includes three conserved warehouses constructed around 1919, Frasers will be exploring sustainable ways to adapt these iconic structures for lifestyle and creative commercial uses, he said. The group will also deploy the Prefabricated Prefinished Volumetric Construction (PPVC) method in developing the site.

Market watchers felt that the aggressive price that Allgreen paid for Royalville could have deterred some developers from bidding for the site at Fourth Avenue. Still, having seven bidders are considered a respectable showing, Ms Li said, adding that the new development may have to sell at around S$2,250 psf assuming developer's profit margin of around 10 per cent of the gross development value.

JLL head of research and consultancy Tay Huey Ying believed despite the keen contests, the batching of tender closings for the two sites may have helped spread the competition for each site, and potentially taming the bids somewhat.

"This is the first time since May 2017 when a GLS residential land tender attracted less than ten bids," she said. "Interestingly, local developers continue to maintain their hold on the prime district market, pipping foreign developers such as China's CSC Land and Hong Kong tycoon Li Ka-shing's Japura Pte Ltd for the two sites at Jiak Kim Street and Fourth Avenue, respectively."

For the first time, Singapore-listed City Developments Limited and Hong Kong-listed Logan Properties joined hands to bid for land here. They came in sixth for the site at Jiak Kim Street.

Like this article? Share it.
MY PROPERTY
TRACKER
The free, personalized advice, advocacy, and guidance for buying or renting property in Singapore
ON TRACK
Property News 22 February
9,999-year Guillemard site up for sale at indicative price of S$99m
At the indicative price of S$99 million with a development charge of about S$14.6 million to maximise the GFA, including the additional 10 per cent bonus balcony, the land rate for the 9,999-year site will come up to approximately S$993 per sq ft per plot ratio
Property News 21 February
Court rules against S$17.5m collective sale of Beauty World Food Centr
The food centre, which occupies the fourth floor of the strata-titled Beauty World Centre in Bukit Timah, comprises 41 food stalls but the title of the property is contained in a single strata certificate.
Property News 21 February
Pomex Court in Joo Chiat up for en bloc sale with S$37m minimum price
Built in 1986, Pomex Court is a freehold residential site in District 15 that sits on 26,471 sq ft of land. Its nearest MRT stations are Eunos and Paya Lebar.
Property News 20 February
Singapore Budget 2018: Impact of buyer's stamp duty
Property consultants generally said that as the bulk of residential property deals are below S$1.5 million, the change to the BSD is expected to have only a mild impact on property demand.

Contact Us

Hello Singapore! I'm Sevi. Ask me any property question.
Chat with Sevi
Sevi - AI Bot
Replies in seconds
Need to speak to someone? 6635-3388
Sevi
I'm Sevi, your personal assistant.

You can ask me basic property questions about transactions, listings, project info and X-value.

Some Examples:

1. Where is Gem Residences located?
2. Are there listings in Hillview Regency for 3 bedrooms and budget of $1.5m?
3. For how much can I sell my property?
4. What are the latest transactions in Bayshore Park?
5. Is it cheaper to buy HDB in Tampines or Jurong East?
6. What is the plot ratio for The Sail?
7. How many blocks are there in Ang Mo Kio Ave 3?

Type RESET or HELP whenever you need.